Hotel commercial strategy is continually evolving as the industry responds to changing consumer behaviors, technological advancements, and global economic conditions. One key trend in 2023 was the increasing reliance on data-driven decision-making. Hotels are leveraging big data and analytics to gain insights into guest preferences, booking patterns, and market trends. This allows them to optimize pricing strategies, personalize marketing efforts, and enhance the overall guest experience.
For example, hoteliers are incorporating new performance metrics that go beyond traditional revenue management, providing a holistic view that encompasses ancillary services with a focus on the bottom line. Continued integration of artificial intelligence in 2024 will only propel hoteliers' ability to analyze deeper data sets for truly informed decisions.
Below is a roundup of 5 trends that shaped hotel commercial strategy in 2023:
It's safe to say nearly all hotel owners and operators across departments are bought in on leveraging data to make smarter day-to-day decisions that ultimately benefit the business. Otelier Hospitality Data Evangelist Jason Freed caught up with several hospitality Commercial Strategy leaders during HITEC 2023 in Toronto to understand how they’re using data to optimize guest experience and profit at their properties.
Just two months later, hoteliers on stage at the Hotel Data Conference admitted that when it comes to implementing a holistic data strategy that permeates decision-making across the entire organization, they’re only in infancy stages. This event recap provides a high-level overview of where the industry is headed, then uncovers BI best practices from smaller discussions at HDC about implementing a more data-driven culture.
For the medium and large hotel management companies with data-driven commercial leaders at the helm, the dawn of AI poses opportunities to innovate their formulas for commercial excellence. Take it from our recent success story, which details the ways Brittain Resorts & Hotels is leveraging Otelier solutions alongside AI to drive innovation and growth.
Unfortunately in many cases, the challenges that hoteliers in the revenue, sales and marketing departments faced in 2023 were largely the same challenges they’ve been tackling for the past decade. In this article, Otelier uncovers how Artificial Intelligence (AI) and adoption in the hospitality space could be just the right accelerant the industry needs. Explore how AI might help solve nagging Commercial Strategy challenges that just won’t seem to go away.
It should come as no surprise that AI dominated discussions at 2023 HITEC as more and more hoteliers were tapping into AI as a way to increase productivity. While there’s some level of skepticism, this event recap proves that many industry players behind the scenes are adopting generative AI in some form or another.
While Revenue per Available Room remains a useful metric for measuring a hotel’s revenue performance, it should be considered alongside other bottom-line metrics to gain a more comprehensive understanding of a hotel’s financial performance, according to this blog. First, the health of a business is determined by much more than its topline revenue. And RevPAR tells only part of the story, only taking rooms revenue into account and missing other revenue sources across the property.
One metric to consider is Total Revenue Per Available Room, which considers ancillary revenues, but operational decisions should be made by diving even deeper. According to this blog, measuring anything in “per available room” could be starting off on the wrong foot, especially for resorts with amenities that don’t require an overnight stay.
In most cases, revenue managers have built strategies and deployed systems to solve dynamic pricing for hotel rooms. According to this article, it’s time to take their talents elsewhere, starting with the F&B and spa departments.
One area that is ripe for innovation is F&B revenue management, and hotels are adopting the same principles and techniques that apply to room revenue management in their various F&B outlets, including full-service restaurants, bars, coffee shops, and grab-and-go marketplaces. F&B revenue management techniques largely focus on dynamic pricing, or adjusting the prices of menu items based on customer demand; and menu engineering, or adjusting the menu offerings to maximize profits.
Post-pandemic, luxury resorts proved to be the crown jewel of the industry, shattering Average Daily Rate (ADR) records month after month. But even when they’re able to charge top dollar, luxury hotel operators face their own sets of challenges, according to this blog.
Staffing issues felt across the entire hospitality industry – scarcity of workers and rising wages – are often exacerbated at the luxury level. And luxury hotel managers often face more pressure to implement costly sustainable operational practices. Because both of those challenges lead directly to rising operating costs, luxury operators must ensure rate increases are strong enough to drive profitability, according to this blog.
One group tackling luxury challenges head on is the International Luxury Hotel Association, which gathered a group of hoteliers mid-2023 to unpack how hoteliers can turn all their available data into a compelling story that drives profitability. A recap of that discussion can be found here.
Read everything you need to know about hotel commercial strategy on the Otelier blog.