Ms. Broussard

Revenue Management

Technology Shaping Revenue Management

By Denise Broussard, Senior Vice President Revenue Management & eCommerce, Interstate Hotels & Resorts

As technology is rapidly evolving, the hotel industry is fighting an ever-changing battle to keep up, working to bring an ease of communication with travelers and maintain a positive image with customers. Heightened dramatically in the last several years, social media has become more prominent with guest reviews, ownership and content. Typically, a hotel's senior leadership is focused on overall reputation management, with the revenue management team optimizing all user-generated content, including social media outlets.

Revenue Managers are constantly looking for new and innovative ways to connect with guests to ensure a positive guest experience. Keeping up with the technology landscape guarantees hotels are able to interact with guests to ascertain a pleasurable and welcoming travel endeavor. With 440 hotels spanning 12 countries, the revenue management team at Interstate Hotels & Resorts - the leading U.S.-based global hotel management company - is cultivating the rapidly evolving technology trends to engage customers through various social media posts, community interaction, hotel events, local events and special events.

Maximizing revenue management results starts with formulating solid strategies based on experience and know-how; Interstate's depth of talent in this discipline - including Revenue Managers and corporate regional directors of revenue management (RDRM) - comes from operating a geographic and brand diverse portfolio. Interstate associates have a depth of experience in channels, systems across brands, asset types, markets and more. In addition, the Company's corporate RDRMs have access to Interstate's proprietary business intelligence knowledge base (IHR1), providing insights into market performance across a broad spectrum of lodging segments and markets.

Importance of Mobile

With technology at the forefront, the industry has seen increases in mobile booking, as its growth is shortening booking windows and increasing the amount of on-the-go travelers who need and want access at their fingertips. Expedia.com reported one in five of those booking travel using the site book via mobile devices. Additionally, tablets produced 200 percent more room nights and 430 percent more revenue than any other mobile device from January to November 2012, according to HeBS Digital. The mobile booking method, along with the instant access of how guests are finding and reserving hotels, and the timeframe in which they are making reservations, has extremely impacted revenue management, as nearly 76 percent of mobile bookings occur within the same day or within one to two days of arrival. The ever-evolving technology is putting instant access into guests' hands with a plethora of choices on available meta-search sites and consolidated hotel sites - the Trivagos and the Kayaks of the world - comparative at all times. Furthermore, visibility on particular mobile sites is made possible with responsive designs that are available on all devices, at all times. These sites are constructed with the right configuration of a web design on the device that is primarily geared toward a 'book now' button to entice guests to book for that spontaneous, timely booking.

Revenue Managers/Directors are part of the hotel executive team, working in concert with other hotel management to optimize the mix, increasing top line revenues for all market segments, which positively impacts RevPAR index and the bottom line. Ultimately increasing direct bookings, and social media provides an incredible opportunity to have a one-on-one relationship with a guest or potential guest.

Impacted by these technological features, Interstate's corporate revenue management team and revenue managers on property use social media, booking and rating websites to manage their hotels.

Driving revenue management, hotels are using technology to activate geo-marketing with geo-tagging and promotional offers. If the hotel's revenue management team knows a guest is within three miles of a restaurant, and it is within an hour of dinnertime, the team sends out a promotional text either the hotel's restaurant and bar, or a partner venue/restaurant to capture the guests within the local, geo-location to reel customers in for purchase, adding a personal touch to the hotel experience.

Managing more than 40 hotel brands across the hospitality industry, Interstate managed hotel teams drive a specific hotel- or outlet-tailored promotion. Moreover, Interstate's revenue management team locally maintains both a sales and social event e-commerce quarterly marketing plan.

Reviews and Tracking

On a global basis, the Senior Vice President of Revenue Management & eCommerce is the single point of contact to negotiate agreements and new contracts for any campaign runs with Online Travel Agencies (OTAs). Agreements and contracts filter up to ensure awareness of promotion and offer details. The SVP can look at the offer and determine net revenue, capture other promotions and then the OTA reciprocates with return on investment (ROI) reporting on the campaign stint.

As the management company for a global-portfolio of more than 440 hotels, Interstate's revenue management team checks channel contribution and detailed OTA production on a daily, monthly and quarterly basis - not only by production, room nights and revenue, but also by day of week mix of sales. From there, the team applies the cost of each channel to get to a net revenue capture by day of week to determine optimal mix, blended commission/margins and net capture for by specific market segment.

The industry is continuously working to figure out specifics driving revenue management with technology and social media. TripAdvisor, with paid business listing opportunities, is available for every hotel, offering a direct booking option. At this time, TripAdvisor is one of the few guest review sites hotels can track from click to conversion, directly correlating with any type of social media or guest review site driving specific revenues. Also, with the addition of the new Travelzoo private sale booking engine, and their Experience Marketing campaigns, the social media impact can be defined for this site. Otherwise, it is a matter of the geo-marketing and conversion. It is an internal process of tracking questions like "how did you hear about us?" or, "what brought you to our restaurant?" or, "what brought you to the bar this evening for happy hour?" and setting up a program in the point of sale system to actually track that capture. This option is best due to the major brands, as well as the hotel industry as a whole, having no reporting in place to track the capture of social media efforts.

Social media outlets have increased the scope of a revenue manager's job by providing a portion of the entire e-commerce marketing and management role, which falls to the directors of revenue management on property. Members of Interstate's corporate revenue management team oversee social media efforts if there is no dedicated associate, or identified resource, in place at the hotel. The revenue management team members take on the extra task, short of the reputation management portion of social media, which is an operational function specific to managing guest service. The team also monitors guest reviews, however, only as they pertain to the review effecting or negatively influencing the booking cycle.

The promotion of positive reviews influences the new guest-booking rate, and according to ComScore - a global leader in measuring the digital world and preferred source of digital business analytics - consumers are willing to pay 38 percent more for hotels with positive online reviews. Promoting positive reviews happen with every associate at the hotel level, from the housekeeper and the room attendant in the hallways, to the chief engineer and bellhop assisting with luggage while chatting with hotel guests. To ensure at every touch-point at the hotel, with every associate, comes a positive experience is a constant goal across Interstate's worldwide hotel portfolio. As part of the overall guest experience to promote positive exchanges with every interaction at the property, hotel staff assures it is top of mind and that the guest - after their positive stay at the property - is ready, willing and able to jump on any guest review site (primarily TripAdvisor) to share details from, and thoughts on, the hotel.

The difference between Interstate and specific hotel brands is that it is difficult for Interstate to gauge any ROI from social media efforts, as the company's managed hotel portfolio is 95 percent franchise brands. Quarterly goals are set for social media activity as far as monitoring via the e-commerce and social media calendar. The revenue management team then tracks data analytics from the hotels' websites, monitoring the calendar and generated revenue during a promotional or interactive period for additional promotional clicks, new visitors and/or new conversions. Therefore, the data analytics show activity on the website when it is a positive impact of activity. As far as revenue capture of conversion goes, the system remains difficult to fully track.

Last Word

Technology continues to be a hurdle within the various brands coming into the 21st century. To keep up with increasing mobile device activity, from smartphones to tablets, updating websites to flexibly view on a number of devices to be ahead of the curve and get in the meta-search world ahead of the OTAs with the first page placement, overall presence/visibility and marketing spend. Revenue Managers must dedicate the marketing dollars it takes, versus the Expedias of the world, to have first page placement no matter what search is made on the web. There is a huge transition that is necessary to occur within brands' technology and web technology to get to where hospitality needs to be if hotels are ever going to be on the same playing field with the major OTAs currently dominating the hotel industry.

Denise M. Broussard is the Senior Vice President of Revenue Management & eCommerce for Interstate Hotels & Resorts. She is responsible for overseeing the global Revenue Management efforts of the companyís nearly 400 hotels in the USA. A 31-year veteran of the hotel industry, and 11 years with Interstate, Ms. Broussard previously held a Regional Director of Revenue Management position and was the former Corporate Director of Revenue Management with Flagstone Hospitality, managing the RFS REIT portfolio, overseeing more than 55 hotels. Ms. Broussard can be contacted at 703-387-3100 or denise.broussard@ihrco.com Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.

Receive our daily newsletter with the latest breaking news and hotel management best practices.
Hotel Business Review on Facebook
General Search:
Coming Up In The December Online Hotel Business Review

Feature Focus
Hotel Law: Issues & Events
There is not a single area of a hotelís operation that isnít touched by some aspect of the law. Hotels and management companies employ an army of lawyers to advise and, if necessary, litigate issues which arise in the course of conducting their business. These lawyers typically specialize in specific areas of the law Ė real estate, construction, development, leasing, liability, franchising, food & beverage, human resources, environmental, insurance, taxes and more. In addition, issues and events can occur within the industry that have a major impact on the whole, and can spur further legal activity. One event which is certain to cause repercussions is Marriott Internationalís acquisition of Starwood Hotels and Resorts Worldwide. This newly combined company is now the largest hotel company in the world, encompassing 30 hotel brands, 5,500 hotels under management, and 1.1 million hotel rooms worldwide. In the hospitality industry, scale is particularly important Ė the most profitable companies are those with the most rooms in the most locations. As a result, this mega- transaction is likely to provoke an increase in Mergers & Acquisitions industry-wide. Many experts believe other larger hotel companies will now join forces with smaller operators to avoid being outpaced in the market. Companies that had not previously considered consolidation are now more likely to do so. Another legal issue facing the industry is the regulation of alternative lodging companies such as Airbnb and other firms that offer private, short-term rentals. Cities like San Francisco, Los Angeles and Santa Monica are at the forefront of efforts to legalize and control short-term rentals. However, those cities are finding itís much easier to adopt regulations on short-term rentals than it is to actually enforce them. The December issue of Hotel Business Review will examine these and other critical issues pertaining to hotel law and how some companies are adapting to them.