Kristi White was joined by industry prognosticator guest Klaus Kohlmayr, chief evangelist at IDeas Revenue Solutions, for the first conversation of the year on the new face of revenue management in 2021.
Listen to the entire discussion here.
Here’s a quick wrap up of the discussion.
Demand has changed, possibly forever, what now? Klaus has some unique insights, based on the hundreds of conversations he has had with hoteliers from around the world for his podcast, Unconstrained Conversations. While he is known for his predictions for technology in the hospitality industry, he has tried to avoid making predictions in today’s volatile market. That being said, Klaus noted that he believes we will begin to see some light at the end of the tunnel by Q3 or Q4 2021, however, he does believe that things will get better as we head into 2022 will bring us closer to 2019 levels.
Key metrics are changing due to pent up demand – The two discussed the various key metrics that have changed, particularly the booking window that hotels are seeing. For instance, we are currently seeing as much as 90% of bookings occurring within 30 days, with 70% often booking for same day stays. They both agreed that this can cause operational issues and it is critical to take advantage of high demand days to adjust rates higher. Kristi noted that this is likely due to the fact that people are going to travel, whether for business or pleasure, as a result of the quarantine.
2021 will be all about flexibility and adaptability – Some of the discussion centered around how many companies are willing to commit to meetings and this this is a likely target to generate revenue during the down time. Many companies are not willing to take on the expense or responsibility of cleaning of corporate offices, but will spend the money to book a hotel meeting room that accommodates their team and provides a safe, clean environment. They both noted that companies are looking to bring employees together for retreats to reignite company networking and culture. Hotels will be a great secondary place for networking and brainstorming, becoming the next generation “water coolers” for business.
Rebound plans are a must – in terms of recommendations to hoteliers, Klaus advised that once government restrictions are lifted, hotels should look to have a rebound plan in place – and do so before the demand begins to hit. For Sales teams: get out and sell; maintain flexible booking policies and plan to react quickly to changes in demand due to changing regulatory guidelines. For the Revenue Management team: when your revenue management system indicates that your pickup is greater or pace is increasing, you need to have a rebound strategy in place so you aren’t left scrambling and can quickly and efficiently react as market demand increases. For Marketing: find customers for your sales team and back up your recommendation with objective data whether by market, profile, account, or other descriptor. For General Managers: look at the entirety of your business and develop partnerships with local businesses to accommodate today’s drive market over the next 6-12 months will help drive profitability.
Work out the kinks and if possible make sure your technology is running smoothly – Klaus noted that hospitality was essentially forced into the 21st century with the pandemic. It has become strikingly clear that guests will look for new touchpoints for interactions such as demand chat functionally, mobile features, efficiencies and technology that allows for remote interaction. From IDeaS’ perspective, Klaus noted, we have seen a lot of companies using this time to invest in next generation of technology, even beyond pricing and revenue management. Then use this period to work out the kinks while you aren’t at full capacity. Klaus noted they have seen companies that can’t invest and are now at a disadvantage compared to their competitors. This will become an issue when demand begins to return.
Final words from Klaus: “I am convinced we will get out of this and bounce back to be stronger than ever over the next few years. Hold tight. Continue to batten down the hatches. Next year, things will look different.”
