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By Christopher Durso, Vice President of Content Development, Hospitality Sales & Marketing Association International (HSMAI)
HSMAI’s exclusive event for Organizational Members will focus on identifying the post-pandemic metrics ‘that help us all speak the same language.’
KPIs are a moving target — and we’re taking dead aim at them with Global Curate, an invitation-only event for HSMAI Organizational Member companies on May 11. Presented by HSMAI Americas and HSMAI Europe and focused on the theme “Defining Success in the New Market,” Global Curate will bring together leaders in hospitality sales, marketing, and revenue optimization for small-group brainstorming to help identify the metrics that will be most relevant to hotel companies as they move through and beyond recovery.
In advance of Global Curate, we talked to Lori Kiel, chief revenue and marketing officer for The Kessler Collection, who will be presenting at the event — and who as chair of HSMAI’s KPI Workgroup has been on the hunt for more accurate, responsive metrics since before COVID.
Was there a particular moment over the last year when it became clear that the industry was going to need to rethink its approach to KPIs?
Actually, it was long before the last year. For me, what happened was the 2018 acquisition of Starwood by Marriott. When they became such an enormous company covering so many brands, all of a sudden my STAR reports that I had relied on so heavily to tell me if I was succeeding — we were taught in school RevPAR par is king, and all of a sudden that lost its efficacy. I was having to reset my competitive sets, because no one brand is allowed to have more than 40 percent of the participation.
That left me longing for a new KPI that I could rely on like I had RevPAR. I brought that to HSMAI’s Revenue Optimization Advisory Board. I raised my hand and said, “I want to know how can we get back to a place where we as an industry can find one KPI that helps us all speak the same language.”
How did the pandemic subsequently inform or affect that work?
Before COVID hit, we had taken a Google Sheet and we had listed out every single KPI that we could come up with. There were 67 of them total and they came from all disciplines — revenue, sales, marketing, P&L. When we were trying to rank those KPIs in order of importance, it became clear that profitability was a big player all of a sudden. I say all of a sudden because, in the revenue management realm, we haven’t always worried about profitability. We’ve worried about getting the revenues in the building. However, what was becoming more and more apparent beyond just the OTA margins was the cost of distribution.
Right before COVID, we had started to say that we’ve got to find a KPI that takes profitability into consideration. And then, how do we train up, so our revenue management team can understand the cost of distribution and measure that in accordance with the revenue stream? It was when COVID hit and you have no money to spend and all you’re wanting to do is bring in as much revenue as you can without spending anything that profitability against top-line revenue was the KPI.
Is the industry heading toward creating entirely new KPIs out of thin air or just adapting existing KPIs?
In some ways, we are searching for the new KPI. We’re doing that in effect by trying to figure out, what are the KPIs that you most value? And if we put those together, what might it look like? So, our group is probably closer to, let’s test these out to find the newest KPI, not necessarily replacing or renaming one that already exists.
In the past, as an example, when we talked about RevPAR, it was never enough just to say RevPAR. What RevPAR obviously played off of was the ADR and the occupancy, and everybody understood that trying to get that balance between the two is what gave you a good RevPAR. Having an imbalance between one or the other hopefully was a strategic decision and not a mistake. Even today, I can look at any hotel STR report, and I can look at the occupancy and the ADR, and I can give you an idea of what’s going on there. We will definitely have a challenge ahead of us to try to figure out a new series of metrics that allow you to look at a report or a balanced scorecard and be able to know right off the bat what’s happening in that market or with that hotel.
What are you looking to learn from the conversations that will be happening at Global Curate?
I really just want to hear where those conversations go relative to KPIs, without leading the conversation, if you will. Rather than posing the conversation as, “How are we going to replace RevPAR?,” I would rather just put the test out there to say, “What are you using today, and why? And how is it effective?” And just get the conversation started, so we can see how many people are still out there maybe even still relying on RevPAR. I’m hoping to just be an active listener in those breakouts to understand what each of the participants is thinking of today as their key metrics.