The Future of Pricing

Since its inception in the late 90s and early 2000s, pricing and revenue management has become a key function in hospitality. In the early days of revenue management, revenue managers focused on inventory optimization, opening and closing pre-set rates according to demand to ensure the best possible utilization of the limited capacity of hotel rooms. Today, a dynamic distribution marketplace allows consumers review all the prices in the market, making pricing a critical focus for revenue management.

Evolutions in the digital space, and related technical and analytics advancements, continue to drive revenue management practices and systems forward. It is clear that the future of pricing in hospitality is data, automation, and analytics. The only question is how to best automate to align with your market and strategy. In this paper we explore the current state of revenue management and the approaches used by revenue management systems (RMS) to support hotel revenue management. We also explore new trends in revenue management systems and analytics that are shaping the future today. Finally, recognizing that revenue management technology is not a “one size fits all” product, we make recommendations regarding RMS approaches and trends that hoteliers should consider, based on their specific market and strategy.

Read the full report from HSMAI Europe by Kelly A. McGuire and Alex Dietz


Shifting From a Transactional Mindset

What do you do when you’ve spent the last 10 years taking inbound leads for granted — and you’re facing the possibility of an economic slowdown? Pivot to proactive selling. A new white paper from HSMAI and Knowland, Finding the ‘Right’ Group Business, explains how. Read an excerpt below:

This proactive strategy — centered on smart, data-driven outreach — should be the new normal. For many hotels, it means a shift from a transactional mindset to one of business development, in which salespeople are focused on the long game. This can pay huge dividends down the line, when your team doesn’t have to scramble to keep up with potentially irrelevant leads.

For relatively smaller brands, such as Rosewood Hotel Group, proactive selling allows for a more consultative approach, especially as it looks at overall long-term spend. Thanks to powerful intelligence on its potential customer needs, Rosewood Senior Corporate Director of Global Sales SiuYin Ko’s team is able to have more candid conversations with key clients about how best to secure more business. “We can also have honest conversations when there isn’t a fit,” Ko said, “so that we can be respectful of their time.”

Through this model, traditional sales roles become a thing of the past. Already, some hotel companies are testing an overhaul of their teams. Take Prism Hotels & Resorts, where an upcoming beta change to the sales-organizational structure will see sales managers dedicated to proactive selling and administrators redeployed to respond to inbound leads.

“Was it broken before? Absolutely not,” said Allison Handy, Prism’s senior vice president of sales, marketing, and revenue optimization. “But success in this market is about strategic changes you can make for incremental improvements, and this is one of them.”

The Power of Proactive Selling

What do you do when you’ve spent the last 10 years taking inbound leads for granted — and you’re facing the possibility of an economic slowdown? Pivot to proactive selling. A new white paper from HSMAI and Knowland, Finding the Right Group Business, explains how. Read an excerpt below:

While meeting and events are among the many sectors that have benefited from a robust economy over the last 10 years, offering hotels a brisk pace of business and relative ease in making their group sales targets, signs now point to an inevitable slowdown in the U.S. hotel industry. Occupancy, ADR, and RevPAR have all grown in 2019, for example, but the numbers are below previous projections for the year. And with an over-supply in new-hotel construction creating a glut of rooms, the group sales process could become quite a bit more difficult. Hotels realize that their current group strategy, with salesforces simply trying to keep up with an onslaught of inbound requests, might not be up to the challenge.

With this nearly decade-long strong economy “we find that our sales approach is far more ‘catch and close’ versus prospecting,” said Lori Kiel, chief revenue and marketing officer for The Kessler Collection. This has meant that her team has had to travel less and deploy more of its resources responding to inbound leads. But the tides are shifting, and Kiel is already seeing a slowing in transient demand in 2019. “We have moved our group mix up at all of our hotels to make up the difference,” she said.

So why hinge success on market conditions? Why not set up your hotel to outperform the competition in all economic times? To do that, you need a proactive group sales strategy. Selling group directly and proactively is a paradigm shift in which salespeople pivot from simply focusing on third-party inbound digital leads to putting resources toward fostering a direct-to-planner business source. This strategy brings relevant groups to the forefront for hotels to reach out to directly, closing gap dates, boosting repeat business, and optimizing profits.

But getting to that point takes deliberate effort, in part because handling inbound lead volume is already a time-consuming activity. The advent of eRFP platforms has given hotels a seemingly bottomless source of leads. While such tools “have given us a platform to reach meeting planners without leaving the offices,” Kiel said, “the question to be asking is: How well are those leads converting and at what cost?”

Sales leaders are beginning to question whether they have the right sales strategy for long-term success. Hotels won’t simply be able to flip a switch to a proactive sales strategy once the economy has already turned, so it’s vitally important to invest in these changes now. Is your team trained up? Do you have the right solutions in place to enable this strategy? What do you need to do to support proactive selling — and are you even measuring the right outcomes?

Room Blocks in Real Time

The Hospitality Sales and Marketing Association International (HSMAI), in collaboration with Cvent, has released Room Blocks in Real Time, a white paper on the benefits—for meeting planners, hotels, and event attendees— of managing group bookings at hotels by strategically applying software solutions.

This white paper seeks to inform hoteliers about real-time data tools that can result in smarter, more efficient group booking management. 

» Access the report