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    HITEC MINNEAPOLIS

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    Minneapolis Convention Center

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Article by Fabian Bartnick

"Netflix" your Revenue Culture

LodgIQtm 15 February 2019
One thing I remember vividly is that every Friday night was family movie night at home. My parents received a weekly "TV program magazine" - every Thursday. Whilst it had some stories about god-knows-what, the main feature was the TV program. This might sound bizarre but even those magazines provided "upgrades" over time when pictures of the movies were included in the generally text heavy program.Here is the amazing thing - Friday night was something the family looked forward to. As we would receive the magazine on Thursday, we would have discussions around "what movie to watch". We had to decide as a family as we could only watch one movie at one channel. Back then there was six channels that were typically wrestling for the top spot - and the winner would get us "brickwalled" for about 90 mins.Crazy to think that a TV program could make you be at a place in a certain time. How was that possible? Well, you could argue that back in the day the most important job at Television was deciding what program to show at what time as it would capture the consumer and how to "present" a small extract to get you hooked. For us - it was a "date" with the TV, a Friday night thing, a time that was planned.Wondering about the parallel to Revenue Management? Here is what happens in most hotels:Daily - RM comes in, runs pick up report, prepares morning meeting numbers, prepares "the story to tell", comes back to do an hour of pricing. If unlucky, GM is already in asking you "what happened?" a question that at that point in time you are not able to answer.Weekly - Revenue meeting - dedicated time to bring everyone together to talk revenueThe above is not uncommon and gives the RM the same "power" as to what "movie to watch". The RM follows the "program" - come in, do pick up report, tell people about it - a morning ritual, a copy and paste exercise that rivals the holy grail. Information shared is solely at the mercy of the revenue manager.Weekly revenue meetings are nothing else than the Friday night movie night - however in this case, the RM decides the movie and dictates what to "watch when". There is only one program, one channel. The numbers are set in the same format every week and the importance of a "revenue meeting agenda" is highlighted in every training you go to - even if you have weekly variations of focus areas, more often that not you are running the same movie repeatedly.And then there is Netflix.My family and I went to Bali for a weekend trip. Arriving at the hotel the kids were tired after the trip - if you have a five and a three-year-old you know that tired, hungry kids coupled with unfamiliar environment is a highly explosive emotional environment to be in. We decided to switch on the TV as a reward for being amazing little travelers. However, try and explain to a five-year-old the concept of TV channels / programs in a world of on demand on device Netflix streaming that they are used to from home.We decided to give a phone to Rafa (5) and the iPad to Hayden (3) ...oh boy - my Netflix subscription did not cover enough devices which left Rafa empty handed (Hayden was just a bit faster on the Peppa Pig). Remember: Tired, Hungry, don't get what I want = tantrum.This situation taught me two important things:The way we deal with information has changed: it is now at the time we want it, at the device we want it, on demand - fast-forward, start again, continue where you left off: as often as you like.Paying $2 a month more for simultaneous device usage is 100% worth it. Ability to upgrade the plan within seconds and making use of it - priceless. In pricing, we would call that "Versioning"."Netflix" your Revenue Management CultureThe biggest barrier for the creation of a revenue culture is: Rigorous tasks and static meetings.If you are currently living in a revenue world where you are dominated by rigorous tasks and unproductive meetings - great agenda, loads of talk, little action (most people know that I never showed up to my own revenue meetings, and I was supposed to run them) - then it is time to change now.Imagine an environment where the full-on meeting is split intoTwo tips to get you started:On demand revenue meeting challenge: Get off your backside, grab any staff member and try and run a revenue meeting RIGHT NOW! Few possible outcomes: A) you can do it, B) you feel lost, C) you are not able to do it, D) staff member think you went "coocoo"Price in the moment: Spending two hours each morning to do your pricing is not going to help you. It slows you down. It is wasted time to do everything at once. Instead of tackling all at once - break it down into little chunks across the day (chances are your insights will skyrocket). Imagine it like a box set series. Whilst there are times where you binge-watch, more often than not you take each episode as it comes (and if you mix it up and watch multiple shows at same time - Good, continue!)Truth is we are lacking agility and speed of decision making. Whilst tasks and structure are important if you are in your infancy of revenue management - a true culture can only be bread across the organization if you bring it into the 21st century - mobile, mobility, on demand!
Article by Fabian Bartnick

2019 Predictions - Blockchain Will Not Be A Buzzword But Will Change Our Life (Part 5)

LodgIQtm 15 February 2019
No news doesn't mean nothing happened. On the contrary: a lot happened. See: DENT -- a great example of adoption with 6.0 million users -- allowing them to trade excess data, see PowerLedger, revolutionising the power grid to a peer-to-peer network and many many more.So what has gone wrong?Well first of all. We got a bit excited in 2017, didn't we? There was no reference price in 2017 and it kept on climbing, ICO's were unregulated and hence anyone could put anything "on the chain" regardless if it was good or bad. Truth is, most people wanted to get rich and had the widely discussed FOMO (Fear of missing out). At that time it wasn't really about Blockchain, it was about the crypto aspect of it and the believe that it would never stop and everyone will get their money back out of it....for many that proved wrong.Then we have the other side of the industry. The ones that get it, the ones that use it to make something better. and guess what -- those companies will tell you that not everything should be whacked on a chain (and yes, there is not "put it on the chain").So what's in store?Well for one, if you can believe some of the news out there -- the average salary for developing blockchain related tech is skyrocketing. Why?"Demand has grown as large companies have begun to work on projects that make use of the technology. Facebook, Amazon, IBM and Microsoft are among companies that have job listings at the moment for blockchain engineers."that means -- IF we see demand for it, why wouldn't it be adopted? and don't get me wrong. not adopted as in you buy blockchain, no, I mean tech running on blockchain (what's the internet protocol written on again?)An when we look at Travel we have really cool companies breaking into the space. Do you hear them shouting from the rooftop, calling it crazy ICO's or wanting to be the poster-child? No, but they have educated discussions around what they want to do and more importantly how it helps:Travelport, TUI, Webjet, etc: all are companies that are making inroads into blockchain tech for travel. I recently met with Monty Doshi, Director, Architecture APAC and discussed what's in store for the industry re blockchain and what Travelport is doing. Travelport predicts (and I agree 100%):In the short-term, most blockchain developments will happen in closed supplier groups on private and permissioned chains within the travel industry.In the mid- to long term we may see payments, inventory and order management disrupted by blockchain or distributed ledger technologies.Whole trip management on blockchain, air settlement and combining of air supplier journeys we see as a longer-term opportunity, anticipating further evolution within blockchain technology. The evolution of open standards around travel blockchains and the willingness of travel suppliers to offer or sell content on a distributed ledger will drive advancements in these areas.2019 in my books will drive the backend more than the "killer-app" that the mainstream is looking for. Companies will start adopting some form of blockchain into their techstack and will show savings and increased productivity with less risk to data breach and hacks. This can be in the form of reconciliations of payments, implementation of direct debits or charges and commission payments, customer record collection, etc. Whilst not 100% travel tech drive, it is touching the heart of every Financial Controller in the industry.Other companies will start the process of digitising real-world assets through shared ownerships (see TEND), others will change the future of funding. This will become interesting for the likes of Airbnb, ownership companies, REITs and of course management companies.
Article by Fabian Bartnick

RM 4.0 - What Teenage Years And Revenue Management Have in Common

LodgIQtm 14 February 2019
You start to be independent!What makes it more difficult is that your transitioning from a "I have just learned everything and kind of got a grasp on the world" to "everything is changing around me". And a lot of the things you did are just not working anymore. It feels like everyone including yourself has changed.Guess what: It is the same in revenue management.Imagine / Remember you did so well in the things you were doing. You did really well actually! As a reward you move into a new job and all of a sudden you face that barrier - in running you call it "The wall". "But I have always done the same thing" and it always worked. And suddenly - different hotel, markets, strategies tactics, customer, etc. You realize you need to adapt - and that can be very frustrating at times.Note to yourself: What got you here won't get you there!Now there is another part of the coin that we need to consider: You might think you are better than you are! You might think of yourself as really really good compared to others. Because of that believe you want to move on and get higher faster; and higher and faster and higher. At this stage you are moving from a stage of asking for help - to "I really don't need help". I can do it alone. The short answer is: You can't.Peter Principle: The Peter principle is an observation that the tendency in most organizational hierarchies, such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach the levels of their respective incompetence. (Management Concept by Laurence J. Peter)Finding yourself at this stage is not uncommon, however this is where you need to stop and pause, and nurture becomes one of the biggest items that will impact your future. Not everyone requires the same TLC at this stage."I break down a new analyst journey into 3 areas that we need to focus on 1) skills (technical skills) knowledge (RM principles, competitor product understanding, hotel product knowledge) 3) experience (the information you learn while you are applying 1 and 2). And we just focus on increasing their capabilities across these 3 areas.When they are ready to take a 'managerial role' than we start focusing on the skills to influence, communicate, lead, delegate etc. But all this while, we have many transparent discussions on what is appropriate communication about revenue strategies etc. In the world we live in now, the ability to write (email) and speak effectively cannot be taken for granted - it's managing perception and not merely whether or not the details you communicate are right or wrong." - Limin Cheng, Director of Revenue & Distribution at Marina Bay Sands SingaporeJust like teenagers require role models, RM's require a mentors / coach. Mentors don't need to be a RM - you need to find people that you look up to, that you want to learn from. You can find them on linkedin, other departments, your personal surroundings - the right person will reach back to you and hold your hand and say: I care. They do that because changes are: somebody looked after them when they were at this stage. And for you it is important to absorb the different perspectives that are given to you. This is not a training, it is a coaching in other areas - finance, ops, marketing, communication. See it as gaining another viewpoint.If some of you are thinking - whatever, no, too complex for them, they won't get it etc. - listen up: and REALLY LISTEN!!!"Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing it is stupid." Albert Einstein.Data is not always wrong, it is the angle, the interpretation of the data that is wrong in most cases. You want to increase your skills / capabilities - not just the analytical - but the transformative skills - leadership, storytelling, communication, business strategy. It is about taking that next step and making the complex simple. It's about finding the connections and bringing unity.Now the next thing you will see: You will be interested in other things and you might wonder off: is RM really for me? Is it worth it and is it working? Am I appreciated? Am I having an impact? Chances are the answer sits somewhere in between: yes and no (sorreeee [?] ). This is not a time where everything is black and white - it's more like 50 shades of grey.Now, what does it mean for you and what should you be doing when you find yourself in this stage of your lifecycle?First: find a mentor. Someone you trust. Find someone who can actively help you and who is interested in YOU, not them, but you - and your success! What got you here, won't get you there! - The will teach you how to overcome the "won't".Second: never stop learning. You are not gods gift to mankind, not the coolest person in the room, not the one that has all the answers. But equally you are not the worst - you are at a point where you are finding yourself! You are who you are - still trying to navigate your own way. If you have stopped, start learning again. Always invest you yourself. The biggest asset to optimize - is yourself. How can you optimize and asset if you can't optimize yourself?!?!Third: Fail, fail hard, fail fast - it's time to experiment. Do different things, try out new tactics. When I mean experiment, I don't mean: screw everything you did. Continue what you did well and fine tune. Then find new things, new capabilities, tactics, etc. that you don't know yet and add them to your list of superpowers.It is the time to take it to the next level - e.g. if you focused on segments, focus on room types and channels.If you are at this stage right now, embrace it. If you have been through it, I hope you can relate. It is not an easy time yet find comfort that all of us have gone through it. And if you need a helping hand, feel free to reach out. Go get 'em!
Article by Fabian Bartnick

Revenue Management 4.0 - Embrace the Citizen Data Scientist (Part 4)

LodgIQtm 14 February 2019
It is interesting, few years back the term Revenue management was very exclusive to revenue management systems. But starting in 2018 everyone jumped on the bandwagon claiming revenue management capabilities and using the word more and more in their marketing activities. This either adds to the confusion of what RM really is, makes it pointless as it doesn't seem to be anything yet everything or we come to the conclusion that is has evolved from a want to a need (and that many players play a role in revenue management).I choose the later and with it we need a new generation of RM's to take the reins. Thanks to the Millennial's and Gen Z we are positioned just right see Revenue Management 4.0 and with it the citizen data scientist emerge in 2019.We know Revenue management is not just number crunching anymore BUT we cannot forget that at the heart of revenue management sits one thing and one thing only: data.What exactly is a citizen data scientist and how can they take RM to the next level? oh, and why do we need them if we have data scientist?IBM predicts that demand for data scientist will soar by 28% by 2020, other sources go as high to say we will have a 50-60% gap between supply and demand for data scientists. And considering that data will exponentially grow (some talking 44 zettabytes by 2020 -- damn, that's 44 trillion gigabytes) we can see that we are in dire need of data scientist.So, citizen data scientist to become the awesome sidekick as Robin, Trinity, Chewbacca:Imagine Citizen data scientists as "power users". They can perform various analytical tasks -- both simple and to a certain extend sophisticated tasks (which previously would have required more expertise).Don't be mistaken, they will not replace the Data Scientist (most don't know how to write advanced algorithms or are able to use Python to get the algorithms to work) but they will complement them by offering their deep domain expertise. Not only that, but they bring in skills from other areas of the business such as marketing, sales and finance.Common traits will include:Contextualized vision of the entire organization -- the big pictureUnderstanding in the application of analytics to solve business problemsNot just a "Jack of all traits" understanding other disciplines, but deeperAbility to lead and turn data into meaningful storiesAbility to challenge the Data ScientistComfortable in the use of multipel RM ecosystems software applicationsMany organizations will and are struggling to find or employ data scientists in 2019. Some you could argue might not need one as the operation is too small to justify. Yet all of the organizations have data, all want to drive their revenues and all to some extent will require help to make sense of it all.The Citizen Data Scientist is not a new word and other industries have used it as far back as 2016 yet hospitality has now come to a maturity where we can and should use this word more often (and will use more often). We will not find them just in RM, but also in Marketing, Finance or Sales.The good news is, most are already here: Many experienced RM's and don't forget Millennials and Gen Z who are all born or blasted since childhood with digital, with data, with technology so are prime candidates to take that role -- in-house or outsourced -- a .....what are you waiting for, get yourself ready. and of course, if you are not sure, give me a shout.and if you enjoyed this post make sure to check out the Birth of the digital socializing or The Digital Native or tune in for The dawn of the Virtual Assistant in Part 4 tomorrow.
Article by Fabian Bartnick

The Dawn Of The Virtual Assistant. Part 3

LodgIQtm 13 February 2019
Did you know...The first tool enabled to perform digital speech recognition was the IBM Shoebox, presented to the general public during the 1962 Seattle World's Fair after its initial market launch in 1961. This early computer, developed almost 20 years before the introduction of the first IBM Personal Computer in 1981, was able to recognize 16 spoken words and the digits 0 to 9. (thanks Wiki!) -- crazy ey? We then moved to Harpy (abilities of a 3 year old) and a few others before getting into Siri in 2011.......2011 ladies and gentlemen! .....ah ah ah ah hang on...we cannot talk about Virtual Assistants and not mention the distant relative here: Chatbots!Current chatbots are, at most, rules-driven engines. Find a question, add some variations, add the answer and to most website traffic it will look like some magic AI show. Chatbots however had a cool 2018 and we have grown fond of them especially since they are so good at answering the FAQ's as well as: "Sorry, I am still learning, ask me something else". I would split my current success rate at around 50% -- 50% horrendous experiences with chatbots, 50% awesome. Virtual Assistants though are a different class.With virtual assistants, on the other hand, we ask a question -- it runs it through Google, finds some answers and then starts giving us recommendations based on our likes, etc, a bit more AI than chatbots, but nothing crazy yet.AND THEN.....drum-roll...we have Duplex. Remember the mind-blowing call that Duplex did? With Google rolling out Duplex to Pixel users as we speak, we will see a massive adoption in the new year.The possibilities are endless and, having met Google at the Maximum Occupancy Conference in Sydney at the end of October 2018, the only part they changed from the initial test-calls is to now have Duplex announce itself as a digital assistant vs being perceived as a true human.A famous quote comes to mind by Astro Teller: "When technology reaches that level of invisibility in our lives, that's our ultimate goal. It vanishes into our lives. It says, 'You don't have to do the work; I'll do the work" NOW WE ARE TALKING!!! Sweet!Although I think there is big opportunities with mainstream adoption of VA's (possibly coupled with AR and VR (Birth of the digital socializing), there are questions that we need to answer around ethics. As Voltaire once said:With great power comes great responsibility!I know I know....you are thinking Uncle Ben from Spiderman :-))For the moment though, let's just enjoy the ride in 2019 and let Virtual Assistants become our intimate companions...
Article by Fabian Bartnick

2019 Predictions - A Year to Remember: Part 1

LodgIQtm 11 February 2019
You could argue 2018 was a confusing year. We've seen new entrants into the market, a lot of buzzwords beaten to a pulp and predictions previously done for 2018 fell short. This doesn't mean nothing happened (quite the contrary), it just means that the world lost interest -- or something more interesting came up.I ran back to 2018 predictions to figure out what was said back then. And a graphic produced by Alan Young in early 2018 came to mind showing the top trends predicted for 2018 by number of mentions:Artificial intelligence (AI)of course, who doesn't?!?!?!? Skynet is so yesterday and every company on the planet now has the most advanced cutting edge off the planet AI engine powering anything from self reading books to pre-packed ready meals.Truth is: a lot has been done good & bad: Meet NormanPersonalizationSeems like Personalization is not good enough -- we have to go Hyper ("To anticipate an individual's desires at any point in time"). But did we truly go Hyper or did we just put 1 and 1 together and got some basic facts together?Virtual Reality (VR)Well that one kinda fell flat. Cool stuff when you are into gaming, very little mainstream action going on though as we still have to find that reason to put on the gear....but that will change in 2019!My personal view back then was slightly different to the above with the two key parts for me playing out in 2018, that is my predictions in December 2017 for 2018:The rise of chatbots: my words were "Chatbots automation, not full sexy AI stuff"More and more chat-bots are coming online with hotels now starting to embrace the Virtual Concierge set within. Companies like Hoperator have starter to take it to the next level and Booking.com went out to say that nearly 50% of post-booking engagements happen through bots.That it would be the year of the PMS, with many hotels switching to new players,A lot of good movement with newcomers now starting to transitioning to established players. Therefore, taking on the old world order. Mewssecuring a new round in 2018, Bookingfactory making big inroads in the independent sector and disrupting other spaces through Channex, FDAintegrating revenue management for their customers....any many more.Enough about 2018 though. Let's crank it up for 2019 and see where the world is going:We are moving from the year of the Dog to the year of the Boar and mark my words: 2019 will be a year of change, real change. A year we will look back at to say: oh boy, this was the turning point. We are just meters away from breakthroughs that will define the way we do business, live our lives and interact with each other.Here are my top 5 predictions:Birth of the new socialisingGen Z -- The Digital Native will rise and shineRevenue Management 4.0 -- Embrace the Citizen Data ScientistThe dawn of the Virtual AssistantBlockchain will lose its buzz but will change our lifeBirth of the new socialising"Hey, how about we go shopping in Paris?", "Fancy skydiving from your couch?", "How about a quick rollercoaster ride before bedtime?", "Not sure about Hot Air Balloon ride or Boat ride on the lake?"Those are all questions that we already can give answers to. Whilst gaming has made huge strides in regards to full on experience in VR, it still requires a powerful computer coupled with a headset that is expensive and might not always be the most comfortable to wear. All items that will change with new gear coming onto the market, most notably with Facebook releasing their new standalone headset, Quest. At a price tag that is affordable, an experience that is unforgettable, with friends you never met -- perfect!We will experience a supercharge in digital socialising. A lot has been cooking and a lot will come together, most notably in VR and AR. If you haven't noticed, e-sports has taken off and is a huge business, hotels are starting to add Virtual Reality Headsets to their Front Desk and Tours & Activities are starting to embrace the far reaching of the experience.There will be a few areas that will start getting mainstream attraction into VR and AR:Pokemon Go is still active. Yup, you heard right. Revenues are going up, player levels increasing and Gen 4 has been released. 2019 will see more and more AR games coming to the market and connect people in ways we never saw before. For me this is a bit like plane-spotting. You instantly can have a topic with people you have never met, yet you are connected and at that point in time have the same interest / purpose.Facebook / Instagram with 360 degree photos. Can you imagine stepping into a picture and having others join you at the same time? being able to talk and interact? A bad time for status updates but a real cool time to catch up with friendsOnline to offline commerce -- Let's go virtual shopping and get it delivered to your door the next day. This could be the "Abandoned cart killer" and also allows global reach for anyone/ anywhere.. We are using our phone 2 dimensional -- time for 360 immersive experiences, don't you think?Tune in for more tomorrow. Part 2 -- The Digital Native & Revenue Management 4.0.
Article by Ravneet Bhandari

Your Guests' Booking Habits are Changing, Yours Must Change Too

LodgIQtm 16 August 2017
The only consistent aspect in the way people plan travel is that it's constantly changing. Each decade brings new ways for customers to connect with the hospitality experience because of both changes in technology and customer behavior.Think about it this way, the industry has come a long way since a sign out front touting air conditioning and color TV were enough to attract a customer; that is, if they could find you. It wasn't all that long ago when finding a hotel meant pulling off the road because you saw a sign, or by researching a potential stay by utilizing thick books published each year by Mobile or AAA.There were also the big annual printed guides from each hotel brand, which eventually morphed into the first hotel internet sites. Of course these sites were essentially electronic brochures and not bookable, but eventually, online booking came into play. At that point, we entered a decade of where travelers spent long hours in front of a desktop computer monitor researching available hotels. Now of course, everything has changed yet again, and it's pushing hoteliers to rethink how they attract guests.Society ShiftsThe simple answer is that smartphones are changing everything. But it's much more than that. To better understand where are now, we must better understand how people's desires and interests have changed in the last decade.Prior to the Great Recession, culture and society focused more intently on collecting things. In fact, the consumption of things was such a part of mainstream American consumerism culture at the time, even then-President George W. Bush included a line about materialism in a 2006 speech. "And I encourage you all to go shopping more," said Bush. The idea was that by spending money, we could keep the economy going strong.That all changed when the Financial Crisis of 2008 struck, cratering spending and rejiggering financial priorities. People began realizing endless spending on things was no longer satisfying. It ushered in the modern "experience era." Rather than spend money on 'things' such as jewelry or a fancier car, people began spending more money on travel and dining out. People started realizing that collecting memories was more rewarding than collecting possessions.Take a look at global hotel revenue, it's increased from $346.75 billion in revenue in 2010, according to Statista, to an estimated $490 billion in 2016. In 2018, revenue is expected to top $553 billion. The same holds true for U.S. restaurant sales. In 2016, restaurant sales were expected to total $782.7 billion, a near $200 billion increase in sales since 2010.While other factors do come into play, these revenue numbers illustrate how people are looking more to connect with other people while doing things rather than buying more stuff. At the same time culture shifted, technological advances gave customers new ways to interact with brands, independent hotels and the entire travel booking experience.According to Statista, the number of smart phones being utilized in the U.S. alone more than tripled from 62.6 in 2010 to 207.1 million in 2016, with an expected increase of another 50 million users by 2020. Together, these two elements are reinventing what customers want from a hotel experience and how they go about booking a hotel in 2017.Booking TrendsThe way people book travel is changing. Sure, there are generation specific trends at play, but for the most part, above mentioned societal changes and massive advancements in at the fingertip-available technology are reinventing how people explore and book travel.A study completed in Fall 2016 conducted by comScore, and commissioned by Expedia(r) Media Solutions, looked at the 45-day period prior to a travel booking. The study examined online travel bookings from various device types and considered elements such as content, resources utilized, destinations considered and digital advertising across the three countries.During this time people crave new information, engaging more often with content via a mobile device than desktop computers. It's why we see research interactions soar during the 45 days prior to booking a trip. Digital users are actively seeking travel related content, and are receptive to new information; nearly one third or more of online travel bookers across the three countries were influenced by advertising.The research discovered consumption of digital travel content is soaring at a growth rate of 44 percent in the U.K., 41 percent in the U.S. and 18 percent in Canada. Travel content is also widely consumed in each country by 75 percent of digital users in the U.K., 70 percent in Canada and 60 percent in the U.S.There's an old American phrase regarding travel that "getting there is half the fun." For travelers, research is the new "fun," supplanting the old ideal as people flock to the research process with incredible gusto. According to the report, Canadians visited travel sites 161 times, Americans visited 140, while those in the UK had 121 separate interactions. And the way they are interacting with research information is changing too.In all, more than two-thirds of travel bookers said search engines, along with recommendations from friends and family, were used most to inspire travel. During the research phase, OTAs and hotel specific websites are considered most frequently. However, the mobile movement isn't just affecting the method in which a customer researches travel, it affects how he or she interacts with information, further upending traditional booking practices. Rather than sit for extended periods of time, research is conducted in short bursts of activity.Mobile Morphing How Customers EngagePeople rely on their mobile devices all day long, and according to Google's "Micro-moments" report, 87% [of users] have their smartphone at their side, day, and night; the average person checks their phone 150 times per day and spend 177 minutes using them. This includes all interactions, not just travel specific ones. Additionally, according to eMarketer, U.S. adults spend nearly three hours per day on "nonvoice activities on mobile devices."Together, these stats point to a massive sea change regarding how customers interact with hotels and are reinventing booking patterns. Take the average commuter who steals glances and interacts with their phone throughout the day. When a trip is approaching, they're most likely researching travel products in bite-sized slivers while on the go, perhaps reading hotels reviews, watching social media consumer created content, or exploring local offers pushed directly to their smartphone as stated above. This means now is the time for hoteliers to rethink how they connect with their customers because instant and meaningful connections are what matter most Then being able to deliver the right price at the right time, every time to secure that booking.Adapting to the New RealityCreating the right price for customers espousing these new booking habits is about understanding the overall value of the individual consumer. For hoteliers, this means we've moved beyond basic revenue strategy into the era of more nuanced revenue optimization.It's such an unanticipated change, it requires reinventing how pricing is achieved, starting with eliminating the departmental silo approach to fully maximize opportunity across the entire consumer journey described above. Analytical capabilities, coupled with the art of designing a consumer specific message, are required to reach today's consumer. An outside-in viewpoint, while keeping the customer perspective in mind, allows hotel executives to understand the full picture, the entire journey, and therefore enabling them to optimize each part of the value chain. This means examining and weighing more data points than ever before. It's no longer good enough to rely on historical data combined with what the perceived competition is charging on any given evening.It's about acknowledging all relevant demand and price-elasticity signals across the consumer journey that provides a common thread of information to the savvy hotelier.Whilst we established that the game, the rules, and the players are changing, it is imperative to be cognizant of emerging and waning channels as consumers move in tribes from one technology platform to another.On average, global media revolutions occur every 50 years. Think about how society shifted from reading multiple newspaper editions daily to radio. Then onto television, electronic brochure style websites, and now social media where reviews and user generated travel content dominates. It moved not only tribes of like-minded people, but shifted generational information consumption.It's therefore critical to be cognizant of emerging channels, and the waning ones too - for example, video viewed on the internet is soaring, while traditional television viewing wanes; mobile devices overtaking laptops and researches anticipating that generation alpha will not use laptops at all whilst Wi-Fi for connecting is out and Li-Fi (Wi-Fi via Light waves) is in. And as every one of these information resources becomes more prominent, it shifts customer booking habits.Modern MetricsAdditionally, we must recognize that each consumer has different priorities for each trip he or she takes - meaning, during each excursion they're more apt to be seduced by a different price, upending everything the industry has held sacrosanct regarding perfect pricing. The rules of customer engagement have permanently changed, and revenue managers must recognize and adapt to this new reality.The old metrics are outdated, and despite the smart advancement of looking at RevPAR, we're now entering a post RevPAR metric world where considering Net RevPAR is essential to better connect with the modern travel buying customer. Whilst definitions can vary, this metric accounts for what the hotel earns after guest acquisition costs are considered, including distribution costs and commissions. This sharpens focus for hoteliers to understand the channels more deeply in which their guests are coming from, while providing insight into how to better appeal to that customer and their behavior displayed.To fully achieving optimum financial results at the property level, the industry must wake up to this powerful realization: Mobile technology and changing customer behavior is inexorably altering the way in which customers interact and engage in the hotel booking experience. Because potential customers are booking differently, hoteliers must work differently to connect with those individuals. The good news; hoteliers reinventing their revenue optimization strategy will not just connect more meaningfully with potential customers during one of those myriad micro-moments, they'll achieve better pricing.Technology, culture and customer behavior have all conspired to change guest booking habits. However, by clearly understanding just how customers interact with hotels in 2017, smart hoteliers cannot only adapt to these changes, they can be better leveraged for both higher profitability and customer loyalty.Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com.
Article by Ravneet Bhandari

Pricing With Confidence

LodgIQtm 11 May 2017
Perfect! or is it?After all, this is the way smart revenue managers and hotel operators have been setting rates for years, and its helped make hotels a lot of money. Particularly, in recent years for many global markets. How could it not be the right thing? Especially since many hotels are probably enjoying impressive revenue.Yet, that's not the case at all. While you were out pricing hotel rooms with what you assured yourself was a full complement of confidence, the rules went ahead and changed. And with it, everything you thought you knew about perfect pricing evaporated.To thrive today, we have to understand those procedures that helped us for years are no longer the holy grail in the way they once were and that industry, guests, and data applications have moved on.Today, pricing with confidence means making decisions based on reams of previously undetectable information. Valuable data we never realized existed because it was invisible to us. We've had the illusion we've attained perfect pricing, but that wasn't the case at all. The good news is, though seemingly more complex, finding confidence in pricing is not as difficult as it seems at first blush.New Rules of LoyaltyThere's been plenty of discussion regarding the true nature of loyalty; we hear about it constantly at lodging industry events around the world. This is of course important because theoretically loyal customers are not as price conscious. They will pay a premium, but to achieve erfect pricing we need to adjust the rules here too.While some argue overall that consumer loyalty is waning, I see it differently. The way customer loyalty is expressed is changing, not the notion of loyalty itself. According to a Facebook survey, 77% of people buy repeatedly from the same brand. In 2017, customers are apt to be loyal to a portfolio of brands from a single hotel company, or book the bulk of their stays within several brand families. We all know those people who have achieved a high level of status with two or more hotel companies.Modern loyalty program customers have different stay requirements each time they travel, setting the stage for them to stay differently with each trip. Plus, during the last 15 or so years, lodging companies have introduced hundreds of brands appealing to smaller and smaller niche categories of people and preferences, eschewing a one size fits all approach.Now brands exist that cater to the millennial mindset, plush luxury experiences, extended stays, resorts, lovers of the boutique experience, and the classic conference hotel, to name a few. The fractured nature of hotel products has splintered the customer base, pushing people to an array of exciting new products that express different parts of the guest personality. Each type of property relevant at different times.A loyal guest could be attending a conference one week and desire being near the convention center. The next trip, he or she may use a boutique hotel to host a client meeting. Then, perhaps, the same customer is bringing the family along on another trip to attend a family wedding. In this case, he or she could be looking for a more value priced select service product.Pricing with confidence means inherently understanding a customer no longer have static needs. The same guest will be seduced by a different price every time, though many customers are desiring the loyalty component.It's a Goldilocks story: The price you post may be too hot, too cold, or just right. Each time a customer travels, the temperature at which they will feast on porridge is different. Hoteliers must inherently understand that serving up the just right temperature for a specific guest will change from stay to stay.It's a revelation upending everything the industry has held sacrosanct regarding perfect pricing. The rules of customer engagement have permanently changed, and revenue managers must recognize and adapt to this new reality. Yes, customers still want to be loyal, but that loyalty is expressed differently - and at a different price point -- with each stay.It's Not the Same Old BARWe're all familiar with BAR, 'Best Available Rate'. In 2017, pegging rates to a benchmark BAR rate can be more effective and efficient than ever before.Historically, setting the most effective BAR rate was part science, part guessing game. It's hard to find any smart professional that hasn't been comfortable with this methodology. After all, hoteliers were basing future forecasts on solid historical hotel data. And it worked. Rate setting wasn't some random guessing, but one with substantive information; especially when incorporating a hotel's comp set's rates into the forecasting process. This is what we call inside-out forecasting, the art of using traditional data points as a way to determine future looking pricing thresholds. While it's served the hotel industry well over time, there is so much more information available now than at any other point in history, that, when used properly, that data can help us refine BAR to create more accurate forecasting.According to IBM, 90 percent of all data ever created was within the last two years alone. If we can tap into this information treasure trove, and make sense of those endless data streams, hoteliers can set an increasingly accurate BAR rate. A new term has arisen to describe the process of utilizing all the emerging data points; Outside in forecasting. It's the idea of taking all that great information previously utilized, and combining it with previously undetectable data sets. But being able to easily understand all that data, means we need some new tools from which to enhance our understanding of all this complex information.New Era, New ToolsTo understand how to maximize revenue for any given night, we must first shift our perception. We're in a post revenue management era, we've quietly moved into the dawning of the revenue optimization era. It's the understanding we are not trying to find best overall rate, but a select group of rates that in aggregate create the most profitable business mix. The essence here is cooking up several different temperatures of porridge to appeal to different tastes. It's the understanding that people want to stay at your hotel for different reasons and therefore have a different price in mind they're willing to pay. The fervent Beyonce concert goer is likely willing to pay more for a room than a business traveler who can visit that city that week, or the week after when rates might be more approachable.To accomplish perfect pricing in the new era, we need to rely on new tools. This is where those buzzwords we've been hearing a lot about lately come into play. Pricing with confidence can be achieved only by leveraging the power of big data and machine learning.Big data refers to the emergence of those previously mentioned invisible data sets. Obviously, a hotelier can make more educated pricing decisions if he or she has more information from which to base a decision. Big data allows smarter decisions to be made, but only if the signals within the big data can be recognized and decoded. That's where machine learning does its part. Machine learning does the hard work for hoteliers, all at a speed the human brain could never achieve. What would literally take years for a person to understand, modern computers running the right software can figure out in moments. The machine sifts through the big data, automatically determining relevant and irrelevant data, weighs the importance of each piece of data in the pricing puzzle, and incorporates it all into a forecast revealing perfect pricing.For example, machine learning can determine there are 40 small events in town on a specific day. Individually, each event has no effect on hotel demand, but together those events in aggregate moves the demand needle. This is a massive bit of insight because it reveals all those people that are more likely to pay a higher price for a room because they have to be in that city on those specific days.Machine learning in conjunction with big data inherently understands that people stay differently each time they travel because of minute yet detectable traces in the data. Machine learning evaluates, weighs, and determines the validity and relevance of myriad data points such as integrating up-to-date market data (including supply and demand), room pricing of direct (hotels) and indirect competition (including peer to peer lodging sites such as Airbnb, and other alternative accommodation options available within the destination), review scores on hotel review sites, among many other variables.Together, big data and machine learning provide the most accurate information from which to base pricing on in the entire history of the hotel business. Setting rates is no longer a guessing game. Leveraging the newest tools on the market gives hoteliers the most accurate forecasting data ever seen. The invisible becomes visible and that porridge is suddenly cooked to perfection ever time.Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com

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