Consultants tackle future of revenue, customers, labor
Consultants tackle future of revenue, customers, labor
05 NOVEMBER 2019 9:58 AM

Discussion at the ISHC Annual Conference in Vienna centered on strategies to keep up with the customer experience, revenue generation and the labor issue in the hotel industry.

VIENNA—When the word “future” comes up in conversations about the global hotel industry, it’s easy to slide into talk about self-driving cars and hotels on Mars.

But hoteliers participating in a recent think-tank conversation took a different approach. Instead of addressing the future in abstracts, they talked about real ways they are tackling today’s hospitality pain points to ensure a better, more profitable future.

Six hospitality consultants, speaking on the International Society of Hospitality Consultants/Castell Project think-tank at the recent ISHC Annual Conference in Vienna, identified three areas where innovation today can result in positive benefits in the future: the customer experience, revenue generation and labor.

The future of the customer experience
The hotel industry may revolve around hospitality, but speakers said often the customer experience is lacking, which results in lost revenue opportunities. They identified a few areas that could benefit from extra attention, leading to more revenue.

The complete travel journey: Hoteliers who wait until potential guests reach the point of purchase before trying to woo them are leaving a lot of potential untapped, said Kate Burda, founder of Kate Burda & Co.

“We need to start connecting with people at the point they say, ‘honey, we need to get away,’” she said. “It’s that point of inspiration. If we connect with them there and help them create their trip, or decide what their trip looks like, not only can I capture more market share, but I also capture more share of wallet.”

She said hoteliers often try to make that suggestive upsell at the point of sale or even at check-in, when it may be too late. The earlier hoteliers have information about guest preferences, the faster and better they can act on it.

Personalization: The idea of mining what guests really want out of their experience can go a long way in delivering value, said Tea Ros, managing director at Strategic Hotel Consulting.

Ros said she’s seen hotel operators experimenting with online systems for guests to indicate preferences that generate a profile, which can help target other services to that guest.

Another approach to personalization is what Ros called “the Amazon way.”

“It’s coming, when we can act like Amazon, which is able to give the customer recommendations based on what they like,” she said. “We will be able to give accommodation recommendations or destination options based on a guest’s preferences and what might appeal to them. We’re getting there; we’re on the right track but behind in executing on it.”

Guest interaction: While data on guest preferences can be gathered via technology, some of the same goals can be accomplished the old-fashioned way—through face-to-face interaction, Lynn Curry, president and co-owner of Resources for Leisure Assets, said.

At the high-end resorts she works with, she said guests spend so much time interacting with employees at the spa, at restaurants and at fitness outlets—people who could be great sources of information for guests if they had the training.

“We sometimes forget that the guest may learn the most about your property from people who are least expected. It’s not always about the concierge or the front desk,” she said. “We have to enable employees in the spa and restaurants to experience their own resort, so they can talk about it and suggest things to guests themselves.”

From left: Strategic Hotel Consulting’s Tea Ros and Resources for Leisure Assets’ Lynn Curry (Photo: Andrea Belfanti)

The future of revenue
As cycle dynamics change around the world, hoteliers involved in all levels of the business are paying extra attention to where they can save and make money. Speakers on the panel discussed new ways they’re helping their clients boost revenue, from the basics to more complex changes.

Think about revenue first: Kristie Dickinson, EVP at CHMWarnick, said she has noticed some fundamental shifts in the sales process that are having an effect on revenue management.

“We’re seeing an increasing trend that is an unintended consequence of distribution coming from (so many different) channels,” she said. “We’ve in essence created sales staff that are receivers. … We need to become hunters instead of gatherers—go out and originate demand that’s not coming from these central funnels. You need to go out and get some business and understand that the business you’re getting today may not be the most profitable avenue for your hotel.”

Burda said one way sales teams can turn back to active revenue generation is by engaging more to serve potential customers.

“Sometimes the hotel and the room and the space are a commodity, and we need to be able to box above our weight,” she said. “Sometimes instead of having the conversation about rates and space, it’s having the conversation about how you deliver on what your customer values. Become the person who helps the client with their own sales strategy.”

Optimization: Jennifer Ramsey, president of Ramsey & Associates, spoke about trends in hotel procurement that are affecting revenue, and why it’s important to optimize the procurement process as much as possible if you want to save money, and arm yourself with knowledge.

“The whole supply chain is changing, and changing rapidly, but the product isn’t coming off the line rapidly in order to do as much due diligence on it—that’s why schedules are so important,” she said.

Transparency and communication help hotels to save money in the procurement process, she said.

“Now you can see analysis of where all your case goods are coming from, and you’re seeing the bottom line, the potential for tariffs, the lead times and the approval schedule,” she said. “It’s all about communication and knowing these pieces.”

Make spaces work harder: Several panelists talked about evolving revenue-generating spaces in hotels, and they advised thinking about all the elements involved, from space to furniture.

Curry said many hotels and resorts are exploring adding multi-use outdoor spaces to spas—spaces that can function as spa relaxation areas during spa hours, but can be transformed to host outdoor receptions and events in evenings.

Speakers also talked about rooftop bar spaces that can transform into outdoor yoga class space during non-bar hours.

In both those examples, Ramsey said it’s key to keep in mind how easy it will be to move and store furniture, for example, to make room for new uses in spaces.

Ros said she has in-depth conversations with her clients to really see what they’re trying to accomplish with the space so she can suggest better ways to yield it.

“Ultimately, you want a hotel where every square meter is used for something,” she said.

From left: Resources for Leisure Assets’ Lynn Curry and Ramsey & Associates’ Jennifer Ramsey (Photo: Andrea Belfanti)

The future of labor
Speakers agreed that labor management and recruitment are key issues affecting the global hotel industry’s near future, and suggested some fundamental shifts in approach are needed.

Back to basics: Judy King, founder and principal of Quality Management Services, said some of what worries hoteliers about labor in the future can be solved by going back to the basics.

“For us to evolve in the future, what we really need to do is go back and take a look at some very fundamental things, like having a great orientation program,” she said.

Those programs get new employees engaged from the beginning and help transfer that engagement to guests right away, she said.

Nurture managers: The same goes for management training, King said. “Because of the labor shortages, we have people functioning as supervisors who we haven’t equipped in any way for their new position,” she said. “I liken it to a butterfly who’s been pulled out of the cocoon too quickly.”

Facilitating personal, one-on-one relationships between employees and managers can go a long way in growth and development, she said, particularly for people who may be advancing quicker than they have in the past due to labor shortages and key roles needing to be filled fast.

Encourage work-life balance: King said that as younger generations move up and workplace culture continues to evolve, work-life balance becomes increasingly important—and good employers will be able to recognize that and plan for it across the workforce.

“Work-life balance is something we must master,” she said. “We often have really capable employees who burn out because we’re working them hour after hour after hour because there’s no one else, and because they’re good, and because we haven’t worked on the development of those under them with lower skillsets.”

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