Now that the industry is largely through the post-pandemic recovery, it’s time for us to get back to planning and focusing on more forward-looking initiatives, as opposed to the firefighting we’ve been doing for the last four years.
We’ve had some core aspirations for a while:
- Deliver personalized guest experiences
- Leverage more analytics in revenue management
- Better serve SMBs
- Take advantage of generative artificial intelligence (GenAI)
Yet, even before the recent disruption, we haven’t seemed to be able to make progress. That’s because we’ve been doing these things wrong all along.
I recognize that hard work, logic, and conventional wisdom got us to where we are. These initiatives require investment in time and resources. Of course, the value of getting all this right is clear, but we aren’t. It’s time to take a step back and rethink. Here are the four things we’re doing
wrong, and ways we can do better.
Personalization
We’ve (rightfully) connected personalization with data and put a lot of effort into collecting and integrating it (or at least thinking about doing that). Of course, more data — and more detailed data — is useful.
It can help expand the depth and breadth of decision-making and increase confidence in recommendations. However, data management is hard and time consuming. And part of the problem is thinking that the data has to be perfect before we can get started. The other part is this: We’ve been so myopically focused on the data that we’ve lost sight of the actual goal: We must provide a product that our guests want to buy. People don’t respond to an offer because you got their name and the details of their last stay right. They respond to the offer because it’s something they want. It’s relevant to them. They respond because you made it easy for them to find and buy the thing they were looking for.
It’s important to note that you can be relevant with very little information. I’m writing this in the (so called) spring in Upstate New York.
When I woke up this morning, my car was covered in frost. If you sent me a last-minute offer for a resort somewhere warm this weekend, you better believe I’d be thinking about it. All you’d need is my ZIP code and a weather report.
How do we get it right? This is going to require a mindset shift more than anything else. Don’t stop collecting, cleaning, and analyzing your data, but shift your perspective a bit from the tactics of the detailed data to the strategy of becoming more relevant and resonating with your customer.
Start by defining a small set of personas that represent your common guest types, then define a journey that would be relevant to them and test it. Think about a set of offers that solve some of the broader traveling public's core needs. Pay attention to how guests are using your properties. Are there some common needs that are going unfilled? Guest feedback can be extremely useful, if you’re able to really mine it to uncover what they’re actually talking about, and not what you asked them or wanted to hear.
Generative AI
As this capability has exploded on the scene, executives across all industries are trying to figure out what to do with it. There are practically limitless options, but we’re running around with a hammer (GenAI) looking for nails (business problem). This is totally backwards, and will set you up for failure, either in the implementation or in the impact.
Of course, this is totally natural, given this technology’s huge potential. In fact, this is not unique to GenAI. We’ve been doing this with every new
capability that’s come along for decades.
How do we do it right?
The right way to go about this is to add GenAI to your toolkit by building organizational readiness and technical capability, then pull it out when you find a problem that needs it.
In fairness, GenAI is new and the possibilities are staggering — many likely beyond our capacity to even conceptualize. You’ll also need to continuously educate yourself on what it is and how to use it so you don’t miss an opportunity.
However, if you start that education without a solid idea of what your organization is trying to accomplish, you’ll easily be distracted by a shiny application that, in the end, might not have sufficient impact. Take inventory of your goals, your business pains, and most importantly, the projected impact of solving them. The most successful AI applications I’ve seen are when the organization had a pain point to solve and a well-defined goal or end state. This changed to focus from simply getting AI to developing a long-term, sustainable use case.
Revenue Management
Many hotel companies have invested significantly in analytical pricing solutions to drive top line revenue. The revenue management system (RMS) is meant to be a decision support tool for your revenue managers. It doesn’t set strategy; it supports strategy. Your revenue managers set strategy. They’re wasting their time with overrides and wasting the general manager and owner’s time blaming the system when people question recommendations. Who cares what the system says? It’s your strategy, you need to own it!
How do we do it right? You need to let the RMS do its job. This means ensuring the solution accurately reflects market conditions (i.e. the forecast is correct), and is properly configured (floors and ceilings, MIN/MAX LOS etc). Then, let it manage the routine dates across the horizon, freeing revenue managers to manage exceptions. This will require ongoing investment in training on the system. Your teams need to understand how it “thinks” and stay up to date on the latest standard operating procedures and newest enhancements. It also requires a change management. Revenue managers are used to pricing. With a system, they don’t do that anymore. Instead, they become market strategists. Their goal is to identify and exploit market opportunities while mitigating market risks.
B2B marketing
Hospitality companies have always separated sales (business to business, or B2B) and marketing (business to consumer, or B2C). We siloed the functions, so we siloed the way they work. Marketing has moved to digital quickly as the market evolved. B2C guests rarely speak with a live person before they get to the hotel. Sales hasn’t gone through this evolution. B2B clients have to call a sales rep to book anything. It’s remained an in-person function. Why? In this new normal where SMBs are increasingly driving business, it isn’t feasible — let alone smart — to operate this way. Our B2B customers are online for their B2B interactions the same way they are for their personal interactions.
Let’s meet them where they are!
How do we do it right? We need to think of marketing to B2B customers the same way we think of marketing to B2C customers. Actually, we need to think about marketing to B2B customers full stop. As more and more interactions become digital, you should be where your customers are — regardless of what they’re buying.
Digitizing the B2B sales process will allow you to scale to meet the needs of the fragmented, but powerful, SMB market, while continuing to nurture relationships with your large enterprise clients. It will provide automation and analytics that will ensure you’re managing the customer journey properly, while also prioritizing the next best action your sellers should take. This is both a shift in mindset and a technology investment.
We’ve made significant progress to get to this point. But if we don’t shift our mindset, we’ll start down the wrong path, and it will become increasingly difficult to adjust. The suggestions I make above will help you prioritize investments and, more importantly, see the impact of those investments sooner rather than later. The good news is that most of this is just looking at a problem or an initiative in a different way. Before we charge back into the future, let’s take a moment to set ourselves on the best path!
