Author: Jason Smith

Why Profitability Matters Now More Than Ever

Posted on | by Jason Smith

Sabrina Jackson, Senior Director of Product Management, Duetto

Profitability tells the true story of a hotel’s financial health, impacting whether a company can secure financing from a bank, attract investors to fund its operations, and grow its business. Companies cannot remain in business without turning a profit.

Hotel professionals have been historically hyper-focused on revenue. However, to achieve maximum profitability, they need to dive into more precise data. Revenue only tells you part of the story. It describes how much money is coming into a property, but it ignores operational efficiency and how much money a hotel is spending to run the entire operation.

When analyzing hotel performance, Revenue Managers should think of themselves as Profit Managers. They are in a unique position to directly impact and attract high-value, loyal customers and focus on net cash generated and return on investment (ROI). If they can achieve higher profitability and growth, revenue teams will solidify themselves as the most valuable department within a hotel’s operations. To do this they must implement a dynamic revenue strategy.

1.     Manage all Revenue Streams

While room revenue is the biggest source of income for most hotels, it doesn’t mean that all other revenue streams should be overlooked. Hotels can boost revenue and profit by focusing on ancillary operations within the hotel, such as food and beverage, meetings and conferences, golf, spa, and parking facilities.

2.     Measure and Analyze Total Guest Value

Total guest value comprises the revenue a customer brings in from all profit centers, less all costs associated with that customer, including package and acquisition costs. With these insights at their fingertips, hotel revenue managers can more effectively target a property’s most valuable guests, as well as accurately forecast demand, optimize revenue, and drive higher profit margins across all customer segments.

3.     Create a Channel Strategy that Maximizes Profits

By understanding channel costs, like commission fees and transaction fees, Revenue Teams can start creating real strategies and stop treating all channels as equal. They can choose to pull different levers like:

  • Increase rates
  • Renegotiate contracts
  • Apply restrictions and stop selling on less profitable channels
  • Run marketing campaigns to target high value guests
  • Reduce availability

In addition, watching cancellation trends can be an effective strategy. Cancellations can throw a wrench into a hotelier’s strategic planning — and that hurts the bottom line. However, a tighter look at cancellation trends can illuminate opportunities for profit growth.

  • Identify specific channels with especially high cancellation rates
  • Measure monthly trends to see how seasonality affects cancellations
  • Pick out the channels that have fewer cancellations

Ultimately, Revenue Teams should know which channels are the most profitable and how to maximize their return on investment.

4.     Create Loyal Guests

Creating and delivering a strong guest experience is at the heart of running a profitable hotel. By knowing your guest, you can build internal sales strategies that boost guest spending. To see a fuller return on investment you need to give the guests the services they want. In the long run, you will profit from loyalty programs with extended length of stay (LoS) and repeat customers.

5.     Look Beyond Revenue

If hoteliers want a full picture of profitability, the smart move is to monitor more comprehensive metrics, such as TRevPAR and NetRevPAR.

6.     Unify Marketing and Revenue Teams

Drive strategy with a unified marketing and profit approach. Run promotions that are targeted at bringing in the highest value customers and create sales incentive programs that create opportunities for upsells in the purchase process and on-property.

Building a strategy around profitability will allow hoteliers to focus on net cash generated and return on investment, which will:

  • Increase revenues
  • Decrease operating costs (including Acquisition and Marketing Costs)
  • Improve efficiencies
  • Make your property more competitive

Discover more about pivoting your business strategy to total profitability in Duetto’s latest eBook: ‘How to Boost Your Hotel’s Total Profitability’. Download your FREE copy today: https://www.duettocloud.com/special-reports/how-to-boost-your-hotel-total-profitability 

Executive Interview: Michelle Woodley, President, Preferred Hotels & Resorts

Posted on | by Jason Smith

Discover how a love for the art of entertaining led this hospitality powerhouse to become the President of a hospitality group in an industry as unique as the people who work in it.

How did you get started in your nearly 30-year career in Hospitality Sales, Marketing and Revenue Management?

I started right out of college. My first internship was actually in finance with a major hotel group. I quickly came to find I was not cut out to be in finance. A gentleman I had interned for knew of an opening at a hotel that had recently opened which was the Swissôtel Chicago and that they were looking for a systems manager. I remember going over there and just being dazzled by the hotel itself, but more importantly by some of the people who I met.  Although I didn’t have a background in systems, I just felt that it was a good fit for me at that hotel and that I could figure things out and learn things along the way. After about a year and a half, I got to really know the office manager pretty well and she was actually moving on to become the room service manager and she wanted me to become the front office manager. I said that I’ve never been a front office manager before and she said, “Look you’ve never been assistant manager before either. Look how successful you are.” So, I was really fortunate to have a mentor there to believe in me and take me into another role which was as an office manager. I bring these positions up because I believe that knowing the back end from a systems standpoint, knowing the operations from a front office perspective is actually what helped me later on in my career where I entered into revenue management, sales and marketing.

My career as a front office manager with this hotel was great. I did that for my two or three years. This was back in the early 90s when revenue management and central distribution for hotel companies was really starting to make an impact on business and there was a lot of attention on it. At that point in time, I got to know the president of the company of Swissôtel and he wanted me to take a look at what has happened happening in central reservation in central distribution and, again, this was relatively new in the hotel industry. I was really fortunate to be able to move into a corporate role where I actually headed up our central reservation system. That allowed me to travel the world and train users across the board; not only the people in the reservation department that would use central systems, but also directors, sales directors, and marketing managers and educate them on what is central reservation system and show them how there was influence in the areas of sales and marketing and the idea to influence your sales through central reservations.

People bought into the idea that there was this ability to reach others around the world through technology, but the idea of revenue management and hospitality was relatively new.  It had already been well-established in airlines. At one point the president of the company asked me to actually write a white paper on revenue management. So, I spent a lot of time researching and talking to the airlines about what was happening in the area of revenue management. I eventually wrote a white paper about the future of revenue management and the impact that it could have on Swissôtel and our properties around the world. That led to a slightly broader role that included not only central reservations, but also included revenue management. I really had a great time doing that with the ability to interact at the property level as well as at the management company level in educating and helping people understand how these tools could assist them. But at the same time, also having the opportunity to listen to what the challenges were across these disciplines, across sales across marketing, and across operations. That led to a broader role as Vice President of Electronic Distribution and Marketing which was online marketing inclusive of revenue management, distribution and online marketing on a global basis.

Then I moved on to Preferred Hotels and Resorts back in the early 2000s as Vice President of Marketing and Distribution. In that role I had responsibility for the marketing discipline as well as distribution. I served as a liaison in making sure that all of the strategies we were implementing on the marketing and distribution side were integrating and complementing our strategies on the revenue management side. I moved in to a role as Senior Vice President of Global Marketing Strategy. Preferred Hotels and Resorts is made up of close to 750 independent hotels around the world, so it was a much broader role than I had previously. It was more a role of education and making sure that things were getting integrated at the right points of contact, so that to the consumer the Preferred Hotels and Resorts brand was presented consistently and that our revenue management and distribution tactics also were cohesive.

After serving in the global marketing strategy role for a while I actually wanted to go back to my roots in revenue management. I really liked the marketing side of things, but I felt I was getting a little detached from revenue management. I was able to take on the role as Senior Vice President of Distribution and Revenue Management which was where my passions were which continued to expose me to many different areas of the company. In 2015, I moved into a broader role as Executive Vice President where I really focused on integrating our disciplines across the board, both for the growth of the Preferred Hotels and Resorts brand as well as driving revenues into our hotels.

About two years ago that grew into the role of President where I continue to directly direct some departments, which include IT, sales on a global sales basis, as well as group sales, marketing, distribution, revenue management, and customer relations. My role here is not only to make sure these departments are operating effectively, but to ensure collaboration with our regional teams. My main role is to make sure that we have great internal collaboration so that what we’re delivering and offering to our hotels is a cohesive solution and something that they can take advantage of.

What attracted you to the hospitality industry and still excites you about your work today?

I have always loved the art of entertaining. I think that if you get a DNA test on me my blood would show that hospitality is in my blood. I come from a Greek family so hospitality is always been something I was raised with. Growing up I always loved to be a part of what was going on in our household. I did a lot of cooking and I did a lot of party planning like my mom would have her bridge group over and I would prepare their luncheons for them. I even prepared my brother’s senior high school senior prom me over him and six of his friends. I always loved the planning, the preparation, and the thrill of executing on those kinds of events and am always excited to see people’s reactions to it.

I believe that the definition of hospitality is very true. If you look it up in the dictionary it’s about receiving and treating guests and strangers in a way that is friendly and welcoming. Whether it’s in my personal home, whether it’s in a hotel lobby greeting a guest, or whether it’s in the boardroom, it’s those elements of hospitality that are so important to our industry today. Nothing excites me more than seeing a happy hotel; one that we’ve been able to assist with solving some of the challenges that they might have. I want to make sure that all of our associates that work at Preferred Hotels and Resorts feel welcome; that they know that they have a place here. That means bringing people into the organization and making them a part of something bigger. It’s what really brings joy to my life.

What might surprise people about what you do on a day-to-day basis?

That travel is not 100-percent glamorous. It certainly has its fine points and it is amazing to travel around the world and see some great destinations and some wonderful hotels that I get to see in our portfolio. But there are a lot of delays that come with travelling. Yes, I do get to go to great places, but I have to remind people that it’s not all as glamorous as it seems. At the same time, I think there is a misconception that all hotel people are alike. That maybe they’ve all come up through food and beverage and they’ve all come up your operations and really that’s not true at all. You really get to know people and you get to see that everyone truly is unique and I think that that’s what actually makes hospitality such a unique industry. It is all these different personalities and personal experiences that makes customers want to come and visit hotels. It’s not as much the brick and mortar as it is the experience.

What kind of person is a good candidate for Hospitality Sales, Marketing and Revenue Management?

I think what’s really important for people looking to go into hospitality sales and marketing is to make sure that they understand what hospitality is: hospitality is the art of welcoming strangers and friends into your world and treating them with respect and treating them hospitably. And I think that applies not just to the operations people. Sometimes people think that only front of house people have to be that way, but I truly believe that whether you’re going into finance, into revenue, or into sales and marketing, you have to understand what that is.

I also think it’s really important to understand what it means to have made a commitment and be conscientious about what you have promised. On the sales side of things we make promises to people about what our hotels can deliver. On the marketing side through our communications we make promises to people and even on the revenue management side we make promises to people in the rate that they’re going to pay. We have to understand that that’s a promise we’ve just made and ensure that we deliver on those promises. I think sometimes that gets forgotten. When I talk to people entering the hospitality world or even people who are already in hospitality, I say make sure you recognize that you are making commitments every day in different areas.

And, of course, being able to adapt to what is going on in the world. Our industry is in constant change which is one of the things I believe actually makes it super exciting. If you want rigid and you want the same thing over and over, then hospitality is not for you.  Being adaptable and also understanding that there’s always new things to learn is super important.

What other careers lend themselves to a comfortable transition into hospitality?

I think there’s a lot of careers that do. You think about any career that involves serving others. Restaurants fall under the hospitality umbrella, even airlines fall under that umbrella. Healthcare is one that people don’t always look at as being easily translatable, but I think it is. A lot of it goes back to what the DNA of a person is and their ability to transfer skills from one area to another. We like to bring in people from other industries because of other perspectives. The travel industry is so big and so broad and effects so many people that if in your world you had to deal with people moving from one place to another, traveling or experiencing things that were new to them, I think that those skills are transferable into hospitality. Especially when we look at the sales, marketing and revenue management side of things, because the underlying disciplines are very similar. But it’s all about how you apply them into our world of travel and hospitality.

Executive Interview: Amanda Voss, Vice President Sales, Bellagio Las Vegas

Posted on | by Jason Smith

Discover how a chance visit to Las Vegas led a young professional to double down on a career in hospitality and make her mark on the Las Vegas Strip.

How has your career in hospitality sales, marketing and revenue management opened your world?

I believe that hospitality has opened my world through emotional intelligence. Understanding
people is so powerful. You start seeing the growth of the emotional intelligence you get with your clients; the special things that you can do for them or make them look good by holding a successful meeting and making sure all those wow opportunities are made. And then you evolve into a leader of people. Your emotional, intelligence affects your teams, and how do you get the best out of your team, and how that correlates to you being able to reading people. So, it goes from your external clients to your internal clients. And both are just so important. I think the hospitality world really helped me, through my career, gain a stronger emotional intelligence.

How do you get from the beginning of your career in hospitality to where you are today?

I started out at MGM Grand as a front desk agent and room reservation agent. I was going to college here at the University of Nevada, Las Vegas. It was a great part-time job to get my first taste in hospitality. I was also a hospitality major. After graduation, 9/11 hit and the opportunities were not as abundant. So, I took whatever job I could get because in my head as long as I worked hard, I thought, I can move up. I got a Receptionist job in the sales department at Treasure Island. And that’s where things really started to bud in my career. I moved on to be a Convention Services Manager. And then I actually was able to decide that that was the point in my career that I wanted to go into sales. And so I took a step back and actually came to Bellagio as a Sales Assistant in the convention department, which then led me to the Mirage Hotel, where I became a Sales Manager and then opened ARIA as a National Sales Manager. Ultimately, I became Executive Director and then was transitioned as Vice President of Sales for Monte Carlo Resort, where I worked with a transition team to make it into Park MGM. Most recently, I came over to Bellagio a little over a year ago as the Vice President of Sales. So, a long, storied career within MGM Resorts. I moved wherever the opportunity was.

What still gets you excited about your job today?

I am definitely a people person. I love my teams. I love working with new teams, tweaking it a little, and seeing them flourish. When I first started out in the hotel business, I have to be honest, it was a fluke. It was not on purpose. I actually came out with my family. We had an uncle who was a who was a big gambler. And of course, that whole experience, I thought, wow, if I could be this casino host and I just made sure everybody had a good time. That sounds like a great job, right? And I’ll never forget riding my first time in a limo from the hotel back to the airport. And we’re looking at the freeway. And my dad pointed out UNLV to me. And he said, Amanda, that’s one of the top ring hotel schools. You should go to college there. And that sparked my interest. There’re so many different jobs. You can go anywhere within a hotel. You can work one job for six months and in a year and say, hey, my interest is now this. Everybody has an important part in the hotel. I love all the opportunities under one roof.

What kind of industries translate well into a hospitality career?

We look for someone who has great customer service. And I always say, you might find your next support person scooping ice cream. You might find them in the retail industry. As long as they like people, then you can train them to be your support system. And you really hope that your support is someone that you would want to grow within the company into management and leadership. Anybody who is in a service industry could be someone who could translate. When it comes to revenue, you should definitely be a person who loves numbers.

What should a potential hospitality employee be looking for in a world class employer?

One of the big things that I believe in is succession planning. You definitely want to know what is the succession planning for a job and how can I grow. When you’re going for a job, you’re choosing to step into your future and it doesn’t just stop with the job that you’re applying for. Succession planning tells you they’re making a firm investment in their employees and they want their place to keep growing and growing and growing. You want to feel supported by succession planning so that you can make a long-term investment into that company. So that should be a key characteristic when you’re looking for an employer: succession planning. And then also tell me about your culture. Your culture will tell me a lot, as in do I align with your culture? Do I compliment your culture? That’s something I want to be a part of because you want to enjoy your job every day.

How important is it to have a robust network of quality contacts within the industry?

It is so important to have contacts, whether it’s in your city or out of your city, because you never, ever know when you’ll need them. I may have a piece of business that I can’t place here at my own property or sister property, and they might be able to consider another city. Or maybe I want to do something special for a client that is not staying at my property. Maybe I can create a wow moment. It just makes business easier, because you know who to call to make things happen. The other reason I think it’s important to have contacts is sometimes it’s great to just bounce ideas off of people who are maybe not even in your industry. Some of my great mentors aren’t even in the industry. And some of my great mentors have been in the industry. So, I think it’s very, very important to extend that and it can be intimidating when you’re first getting into the business. Platforms or associations like HSMAI help facilitate that for you and make it a lot easier being a member so that you can gain those contacts.

Executive Interview: Barb Bowden, Complex Managing Director, Loews Sapphire Falls Resort and Loews Royal Pacific Resort at Universal Orlando

Posted on | by Jason Smith

Hear from a revenue management pioneer about the evolving and exciting hospitality industry.

Q: How has your career in hospitality opened your world?

A: Without a doubt, I think my career in hospitality has opened my world just with the relationships that you build with so many different audiences; team members, colleagues, guests, meeting planners, those in professional associations. I think these relationships absolutely create a network literally all across the world.

Q: Where did you start and how did you get to where you are today?

A:  I began right after college. My very first role was working at the front desk at the Buena Vista Palace Resort right outside of Disney in Orlando. After two years at the Buena Vista Palace, I joined the opening team of the Peabody Orlando and actually remained there for 27 years, beginning with various leadership roles, primarily in front office and reservations. Then in 2004, there was really kind of a change in my career path when I was tapped to create and implement the very first revenue management infrastructure that Peabody Hotel Group had. So that included creating the organizational structure, the strategy, technology, supporting processes and operations, which was a remarkable experience at that time. I think based upon that experience, I was then promoted to General Manager and, ultimately, Vice President General Manager of our newly expanded hotel. We had just expanded that hotel, so we were growing to 1600 rooms, 300,000 square feet of meeting space. So, really one of the largest convention hotels at the time. So, from there, I was absolutely thrilled to join the team here at Loews Hotels at Universal Orlando, currently serving as Complex Managing Director, overseeing the Loews Royal Pacific Resort and Loews Sapphire Fall Resort complex.

Loews Sapphire Falls Resort at Universal Orlando

Q: You were in on the ground floor of this new side of hospitality called revenue management.  Why is that part of the business so important?

A: Well, I think obviously at that time, the world was changing. You know, technology distribution, the way people were booking reservations. Everything that had to do with not only distribution but rate strategy, really looking at the entire overall organization just very differently than it had been done in the past. New technology was coming out at the time. That was kind of the beginning of a whole different way of looking at pricing and distribution back at that time.

Q: What kind of professional do you think is best suited to a role in hospitality, sales, marketing or revenue management?

A: First and foremost, I think we go back to kind of our roots as a service industry. Those with a passion to serve are absolutely a good fit for our industry. I think beyond that, those who are goal-oriented, and those who are committed to continuous improvement, data-driven, proactive communicators, those who really see and value partnerships, these are all kind of traits and characteristics that serve our industry well.

Q: Are there certain titles or roles or other industries that make the leap over to hospitality well?

A: I have seen so many different types of professionals transition to our industry. So I think from education, from finance, retail, there are so many different skill sets that transfer into our industry. And, typically, once they’re in our industry, that is it. No one wants to go back to the original profession.

Q: What might surprise people about what you do on a day-to-day basis?

A: I don’t think most people are aware of the many amazing career paths that are available in our industry. Many people know event planning or maybe front desk, but I don’t think people really understand all the wonderful career paths that are available from sales, marketing, revenue management to technology to engineering to safety and security, finance, PR, development, all the operational roles. And many people that I’ve talked to throughout my career are very surprised to kind of hear of the many different roles and interests, you know, and amazing careers that are available in our industry.

Loews Royal Pacific Resort at Universal Orlando

Q: What should a potential hospitality professional be looking for in a world-class employer?

A: A world-class employer always starts with a strong culture. In order to really be a great fit, you have to be passionate about the mission and the pillars of the organization that you’re working with and serving. You know, really look for culture and a culture you align with.

Q: Where do you see the industry heading and what does that mean for hospitality professionals as they start to chart their career path?

A: In our industry in hospitality, sales, marketing and revenue management, I think that technology, obviously, and analytics will continue to play a significant role. I think even more emphasis will probably be placed on the customer journey and, really, the ability to create quality customer relationships along with advanced technology and analytics. So, I think that continues to open a lot of doors as we look at the roles available in our industry.