Outside In: What An Observer Sees As The Five Most Overlooked Opportunities in Lodging Sales

April 11, 2016 navisadmin

Cross-cultural psychologists have studied Westerners and their strong tendency to view the world inside out, with themselves at the center, as opposed to outside in, with the lens of an observer. Ultimately, the benefits of the outside in approach resulted in being more in tune with a partner’s perspective and less prone to mistakes.1

Another important benefit of an outside-in perspective is an understanding of common mistakes and opportunities. After speaking with hundreds of lodging providers for 29 years, our team has collaborated to shine a light on the top five opportunities we see many hotels, resorts and vacation rental managers missing out on.

1). Kick the status quo to the curb

“Challenging the status quo takes commitment, courage, imagination, and, above all, dedication to learning.” Marshall Ganz

Most hospitality staffers wear multiple hats; it is just the nature of the business. Sometimes this means that the status quo is accepted all too readily because it feels too complicated or time-consuming. However, new tools and technologies are introduced every day that can streamline processes, reduce soft costs, and increase profits. Often, as a result of this reluctance to integrate new processes, suppliers take the path of least resistance, using increasingly expensive OTAs and quick-fix flash sales, which erode profits and undermine branding. It should be the mission of every hospitality professional to be on top of new organizational strategies and fresh technologies that will make operations more efficient and profitable.

2). Silos no more

People and technology should all be integrated, working toward aligned goals, right? Often this is not the case. Sales, marketing, and reservations often work in silos, and lodging suppliers frequently implement technologies that are short-sighted and don’t play well together. The remedy is to establish organization-wide goals, ensuring cross-departmental communication, and employ technology that integrates across systems (PMS, CRM, etc.). This means that the goals and technology can be accessed by sales, marketing, and reservations so that revenue and occupancy goals are clear, the road to meeting the goals can be more easily mapped, and there is transparency along the path to achieving them.

3). Know your revenue (don’t assume)

Many hotel professionals think group business is their top sales driver, and the website is the highest profit channel. However, in reality, 70 percent of travel expenditure is leisure—this is the reason the vacation rental industry is seeing such a boom. 2

The bottom line: do not make assumptions about your revenue. Review bookings by agents versus group sales. (Likely you will find that their revenue is relatively similar). Then review the disparity between them. Is the group sales team in spacious offices with big commissions, while reservations agents are tucked away in cubicles without sales incentives? Like other areas of your organization, when you empower your reservation agents properly, you’ll be blown away by the results.

Equally important is to have a good handle on what’s driving your leisure demand. PhocusWright reports that 41% of organizations don’t use an attribution model.3 And those that do generally rely on last-touch only. With the booking journey becoming more and more complex, monitor each of your guest’s touch points using hospitality-specific marketing tracking technology to get a clear picture of what is bringing you revenue.

4). You must have one to have the other: on- and off- both matter

Proper attribution of marketing dollars has never been as challenging as it today. A single traveler can bounce around several devices and across OTAs, meta-search engines, and your and your competitors’ websites and still call for a reservation. The same PhocusWright study found that the average traveler accesses 6.5 touchpoints when planning leisure trips – and that number increases with younger people (7.9) and frequent travelers (8.1).4 Online booking data can look very different from offline data (including the information that agents and the front desk can capture from guests about the origin of the inquiry). Reviewing them together offers the most valuable perspective on attribution. Ensure all touch points are collecting data before making conclusions.

5). Goldmines ready to be tapped

Most suppliers have thousands of past guests in their database already but aren’t properly using it to drive loyalty, repeat stays, and incremental lifetime value. Databases are a treasure trove that allows hoteliers and vacation rental managers to customize the guest experience and target messaging—it just requires the right tools and integrated systems. In a recent case study, a NAVIS client saw a 13% increase in RevPAR and 17% increase in ADR through targeted marketing and revenue management strategies to their existing guest database.5 At the end of the day, using data at this level allows lodging providers to create a truly customer-centric culture, one of the three common traits of successful companies according to a study on the DNA of thriving businesses.6

Conclusion

If any or all of these speak to your current operations, it is time to take an outside-in approach to evaluating and, perhaps, reorganizing priorities, staffing, and technologies. For all of this talk about goals, the number-one goal for most suppliers is increasing profit wherever possible, and progress across any of the top five opportunities will no doubt show results.

 

1). White, Lawrence and Steven Jackson. Experiencing the World Inside Out or Outside In. Psychology Today. October 2012.

2). Cederholm, Teresa. Leisure and business travel share importance in US travel expenditure. Market Realist. December 2014.

3) and 4). Juman, David and Marcello Gasdia. Touch and Go: Travel Planning Across Channels. PhocusWright. October 2014.

5). Carder, Pam. NAVIS Revenue Management Case Study. NAVIS Blog. March 2016.

6). Brooks, Chad. 3 Things Most Successful Businesses Do Right. Business News Daily. March 2015.

 

 

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