What’s Old is New Again – The resurgence of old fashioned revenue strategies
Updated: Oct 18, 2019
It’s been quite a while since I was on property (I won’t admit how long, but those of you who know me can wager a guess). Back then we did pricing strategy, revenue & yield management and channel management manually. Remember those days? Spreadsheets, calendars, client dossiers spread out for review and strategy sessions (and subsequent negotiations) that lasted for days… Ah the memories…
Specific clients were given rates based on a number of factors including total annual volume, loyalty (how long have they continued to come to us rather than be lured by other options who would love to have them), maintenance level of their guests (i.e. high maintenance = higher rates / we had a lot of those) and share shift potential.
Once the strategies were decided, and as they changed through the year, the distribution of those rates happened either directly or through the GDS or CRS and increasingly via the internet as this was the dawn of the web as we now know it (am I dating myself?).
A few things over the following decade impacted these different approaches and made many of them obsolete. Those things include:
Rate parity clauses imposed by consortia and OTAs made it increasingly difficult to reward loyal and highly productive accounts with preferred rates and room types, lest you lose the business.
The internet played in increasing role in globalizing rates and bookings, making it impossible to maximize revenues from global regions during their high seasons if lower rates were ANYWHERE else to be found.
Regional origin considerations include local holidays such as Golden Week in Japan (a huge feeder market for the Nikko brand) and spring break in the US. GW takes place at the end of April – early May and is a really popular travel week for the Japanese. For Americans, this same time period is the post Easter low season before summer holidays kick in. While you want to maximize revenues from the Japanese, you cannot attract Americans to travel at that time with anything less than great deals. If those American deals are out on the internet, they WILL BE FOUND by enterprising Japanese travelers and cause a world of ill will with Japanese clientele.
Over the years, we have adjusted our tactics and segmentation lines have blurred considerably… but with technological advances, a fair question to ask is: Is it now time to dust off those old strategies and try them anew?
So, why aren’t we using these same identifiers to present content curated specifically for the point of origin of the customer? If someone is looking at your Japanese website in Japan, it’s a sure bet that you can offer them rates, room types and packages specifically designed and curated for that market for the specified dates they are looking at. Curating content by market goes beyond just rates. The industry’s been doing it for media for a while now, according to Henry Woodman of ICEPortal (a company that helps travel suppliers manage and distribute their visuals to travelers). “The online consumer is much more educated, and they are starting to expect more personalization. As big data and marketing come together, travelers are expecting to see offers, and visuals that are match their needs and interests. The challenge, of course, is first to curate content so it can be shown to specified personas, then it will be to continually tweak the algorithms to deliver better and more tailored content to each of the personas.”
For example, if you know a particular market does not typically book a specific room type, you should be able to exclude it from the offering. If you offer add-ons in your booking process, you should present meal packages, welcome packages, activities or services that you know is appropriate for that market. So for a Japanese viewer you could present only rooms with deep soaking tub, or offer breakfast options in the Japanese restaurant. For a guest from the UAE you might exclude the wine basket add-on option from appearing and maybe only offer your rooms with views.
Now let’s take it even a step further – how about curating your presentation based on the device used? We are already collecting data on how the various devices are used and the associated booking trends from mobile vs tablet vs desktop. Coupled with the region of origin, and any other profile information you might already have on this traveler in your CMS, this could result in powerful custom built offers for each individual guest. Anne Cole, Dhisco‘s Vice President of Content and an expert at leveraging content and distribution technology to develop compelling customer experiences globally, says “In today’s global marketplace, it’s essential to make relevant content available in any language as well as deliver content in a format that can be effortlessly displayed in mobile-ready, bite-size pieces for the user’s device of choice”.
The technologies are all there to enable each part of this scenario to happen independently. Now the question is how do we connect the dots to include this information with the data we are already collecting in our revenue management systems – pace, past trends, etc – to generate this level of dynamic pricing? How can the PMSs, CRSs, IBEs, switches and channel management systems support this concept?
Is anyone already doing this?
What do you think has to happen before we see this as a standard?
Is this something we would be able to only execute on our own websites? Or would the OTAs support our efforts in doing this through their channels too?
We invite your thoughts and insight on this issue… Let us know what you think!
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