By Robert A. Gilbert, President & CEO, HSMAI
The Hospitality Sales and Marketing Association International (HSMAI) Americas Board of Directors members recently offered their predictions for what to expect in hospitality sales, marketing and revenue optimization in 2017. The HSMAI Americas board consists of a wide range of hospitality professionals from all areas of the industry, including representatives of 24 hotels and hotel companies. There were a number of interesting themes that emerged from the discussion. I’m excited to share some of their insights and provide my perspective into the industry trends and changes ahead.
Prediction: There will be more mergers and acquisitions
Certainly 2016 was a year of surprises with the sheer quantity and speed at which both hotel and technology company acquisitions and mergers were consummated. As long as capital exists the race for market share and economies of scale will prevail. The fragmentation of the lodging industry has long made the industry vulnerable to intermediaries who have been able to develop value propositions that the industry could not develop for themselves. Additional consolidation will challenge and test some of that traditional thinking. Ultimately, as consumers pass through the decision funnel they will decide which of the channels (technology or hotel) along their journey will lead them to a purchase decision and hotel choice.
Prediction: Loyalty and branding will be key areas of focus in 2017
This was one of our predictions last year and it certainly came true. The need for hotel brands to offer tangible value to loyal consumers will only intensify. 2016 saw the introduction of multiple book direct campaigns. Will hotel companies or distribution channels redefine loyalty in 2017? Will one win or will the consumer ultimately win with more choices?
Prediction: We don’t know what we don’t know; get comfortable being uncomfortable
From an economic perspective, we know that supply is growing and that demand growth has slowed down. But we shouldn’t lose site of the fact that macro-economic variables in the U.S. have favored leisure demand over the past two years. There has been a meaningful shift in key indicators – corporate profits increasing, consumer spending dropping, etc. So what will be the drivers for 2017? Will leisure travel soften and corporate and business travel strengthen? From a global perspective, there could be positive or negative implications for international travelers based on current exchange rates and fluctuation, and the political unrest that exists around the globe. Saavy sales and marketers will need to be well informed and be able to make decisions to pivot strategies and tactics that align with opportunities.
Prediction: Technology applications will leapfrog
The consumption of digital media has never been greater than today. Digital media consumption surpassed television for the first time in 2016. Finding customers using traditional marketing methods is like searching for needles in a haystack. The implications of mobile usage, big data, social media, loyalty, micro-marketing moments, virtual and augmented reality, faster bandwidth capabilities and marketing technology applications that we haven’t even imagined yet, will be the keys for marketers to find new customers. The rate of acceleration of change is so fast that it will be difficult to adapt to it.
Prediction: Rate and pricing strategies will continue to evolve
Last year we predicted that revenue managers will evolve into data scientists and we believe that prediction came true and that trend will continue. Total revenue management and net cost per channel will continue to be a focus for many hotels and hotel companies. Many feel that 2016 was the year that “we did pricing well.” As supply growth increases – or is differentiated by alternative lodging models - the ability to push rate will vary significantly per market. Nonetheless, rate strategies will only become more complicated as the use of various distribution channels has very divergent points of view from different brands and ownership groups.
Prediction: Accountability for better service standards is good for everyone
For decades, marketers have advocated that the best marketing investment is a satisfied guest. The advent of consumer review sites has added significant power to this premise. All sales, marketing, revenue management AND operations professionals will be rewarded when guests at your hotel have a great experience…and tell more people about it. Research has shown that review sites do have implications to pricing power and reservation conversion. Do this right and do it first. Exceeding guest expectations will always make you and everyone on your team a winner.
As the hospitality industry continues to evolve, HSMAI will continue to provide key insights and unique educational programming in order to benefit it’s members and the industry at large. In 2017, the organization will host seven executive round tables, produce conferences, white papers, webinars and facilitate conversations about emerging issues in the hospitality industry – all of which will be offered online and in face-to-face formats around the world in the Asia Pacific region, Europe, the United Arab Emirates, and the Americas. Stay engaged. And have a successful and productive 2017!