The world is in a transformational moment. The pandemic’s impact will be felt for years to come. In response, guest behaviors and foundational aspects of the hospitality journey are shifting. Changing times present an opportunity for businesses to change what isn’t working and automate where possible to better enable team members elsewhere and give their organization, culture, or vision the reset it needs.
Rather than starting over from scratch, a reset is all about finding ways to improve on what is working while breaking from tradition to solve the new or more complex challenges that arise. This process starts with scrutinizing strategic decisions made across an organizational structure to fully understand the layers that comprise a holistic business strategy.
Adapting
While the industry has the potential to revolutionize business strategy, leverage technology alongside seismic changes in demand, and grow revenue, it would be a significant undertaking. Hotels are not alone in a push for modernization to adapt to a changing customer profile; in fact, they may be late. To adapt to the new marketplace, some industries such as restaurants and transportation have already undergone changes over the past two years.
No matter how a hotel adapts, it is still contending with the disruption to the industry’s labor and talent pool in generations, which will also impact future hoteliers. Operators are experimenting with blending positions across commercial functions, managing more hotels with fewer people, and looking to technology to adapt to new conditions. While safety and service quality has been a top priority, using data to better anticipate demand, profitability, and staffing needs are becoming the tools of choice for those challenging the status quo.
In today’s widely used revenue management tools, hotels change the way they manage their business. More and more hoteliers are relying on automated machine learning to do the heavy calculation of forecasts, competitor rate influence, and overbooking strategies across all room types to maintain sell-through and optimize occupancy opportunities when markets are riddled with uncertainty and cancelations.
Data Usage
Hotels may need to rethink the design of their tech stack to achieve a connected commercial organization that enables optimal pricing and business decisions across all their revenue and cost centers. A first step is to conduct a thorough assessment of a hotel’s vision for the organization alongside current capabilities to understand what must be done to effectively implement changes and enable greater adoption of connecting all areas of the organization—likely with some powerful tech and data insights.
The disruption of the pandemic and ensuing labor shortage have reinvigorated the desire to grow revenue while controlling costs. After a tumultuous two years, some have come out the other side smarter, more efficient, and more technologically enabled than their competition. What could be making the industry smarter is hotels are finally taking advantage of their greatest asset outside the experience they provide, including the insights that can be gleaned from hundreds of millions of booking transactions, behaviors, and data points.
One reset may end up being a series of resets for any business, and that may be comforting and frightening at the same time depending on an organization’s structure. But the industry needs to reset the way it operates because it no longer works in a world where significant change can come at any moment. Break down the silos, bring departments together with data, and find technology that freely shares insights between sales, marketing, operations, distribution, revenue management, and executive leadership.
Resets Risks and Rewards
The more time passes, the greater the likelihood that competition will be using advanced technology and data insights to drive decision making. Most organizations believe they lack the necessary technology to achieve their optimal business strategy. Yet, in every market around the world with significant hotel supply, more technology is being added each day to optimize decision making and manual tasks that can free up employees’ time for more valuable, strategic, or guest-focused activity. Inability to evolve business capabilities is not a risk of falling behind—that’s all but certain—but it is the risk of missing out on opportunities that will never be known or understood. The risk of not changing far exceeds the risk of change.
This is an era of transformation, of taking calculated risks in search of best practices where the potential for failure does not outweigh the opportunity for success. Changing technology is one such transformation, but there are risks of replacing dated technology, spreadsheets, and manual workarounds. The number of data points being taken into consideration is only increasing, whether organizations invest in technology or not. Solutions to many of the industry’s challenges have eluded hoteliers for years. That’s what a reset is about—taking chances to confront tough problems in all areas of the organization for today and to better prepare for an uncertain tomorrow.
About the Author
Blake Madril is principal industry consultant for IDeaS.
