Finance

"Velocity analytics" and "Anomaly detection" sound like cutting-edge tech, but these are just fancy names for basic common sense: watching your booking pace and noticing when something's off. The bigger issue is our industry's obsession with historical forecasting.

This is one of the greatest opportunities the hotel industry has ever faced. Forecasting should no longer be treated as a static spreadsheet, it's more like a live stock market dashboard, where dozens of variables are in motion and projections shift by the hour.

As a seasoned Revenue and Profit Optimization professional I would like to reitarate (which I have already expressed in my book Hospitality 2.0 and other publications): travel demand has always been uncertain, and history never repeats itself.

Since when it's a good thing for the government to determine commissions in the private sector? Commissions are charged in many industries: from insurance to sales to real estate. Why doesn't the government regulate them all? And why decrease the commissions by 25% and not by 19.5% or 26.8%?

I firmly agree that, in many cases, the fees are excessive and that OTA's have exploited the industry's vulnerabilities—particularly targeting independent hotels and softer brands. That said, I do not believe government intervention in commission structures is the answer.

It certainly sounds appealing at first. Let's protect the poor hotels from high commissions but if we've learned anything from economics it's that government price controls tend to create more problems than they solve. Take the example of rent controls.

I was shocked by the claim that there were hoteliers linking their property websites' "Book Now" buttons directly to the OTAs. In hospitality we had a few cases like these back in the year 2000. But now, 25 years later? First, direct bookings are cheaper than OTA bookings.

OTAs are not a strategy - they're a costly crutch. The idea of abandoning direct online distribution in favor of exclusive reliance on OTAs is not only shortsighted — it's dangerous. OTAs are useful tools in a diversified distribution strategy when demand is not strong, but surrendering full control to them is a fast track to eroded margins and loss of brand equity.

Handing your business over to a lottery outcome. Sounds like a great idea! One should not outsource something mission critical to the business. If selling product isn't mission critical, then I suppose knock yourself out! There is no doubt that competing is a tough business.

This is not the first attempt for an ill-conceived differentiated pricing by the OTAs. 15 years ago Orbitz was caught jacking up prices for Apple computer and laptop users under the presumption that Apple users were more affluent than PC users.

This research is indeed intriguing. As a product manager for Lighthouse's parity management solution, I've seen firsthand how hotels use extranet promotions to offer location-specific and platform-specific discounts. However, this study reveals a fundamentally different scenario.

Why not? There are many across industry examples where location and socio-demographics impact pricing for products and services. A few brief examples - Fuel - Drive around your own town and you will find vast differences. Not to mention long weekends.

In my view, last-minute discounting is a super lazy and rookie approach to revenue management and a sure downward spiral to hotel insolvency. One question: why airlines and car rental companies never engage in last-minute discounting?

No actions that drive business to OTAs away from direct channels are good for hotels. It's a simple concept. OTAs have been very creative in finding ways to train the consumer to choose their booking channels over hotels' own websites and this is just another attempt to do the same.

Last-minute discounting is a double-edged sword for hoteliers. It can help fill unsold inventory, but it also carries significant risks that can undermine a hotel's broader revenue strategy and brand perception. From a revenue perspective, unsold rooms are a perishable asset, and this type of policy can be useful to sell those rooms.

I believe rate parity is essential for transparency and trust with our guests. It ensures consistent rates across all third-party channels, avoiding confusion and maintaining our brand's reputation. While we have the flexibility to offer special rates on our own website (a channel we fully own), rate parity helps us manage distribution more effectively with OTAs and other third parties we don't fully control (which we don't own).

I believe that hotels should have the freedom to set different rates across their distribution channels, including OTAs, without being bound by rate parity agreements. Firstly, allowing hotels to set their own rates enables them to respond more dynamically to market conditions and tailor pricing strategies to different customer segments.

Rate parity is non-sense and the RTI ( Retun time invested.) is always negative. here is why: 1. Hotels cannot answer how much additional business they got because of disparity - so easy to throw rocks as to how much money "might have been lost" vs 2.

I don't think this is a good move from Booking.com as indeed advance purchase rates (with no refunds or cancellations) have been a useful tool to attract budget-conscious guests and ensure steady cash flow for hotels. Nowadays, guests are even more price sensitive so by removing completely prepaid rates at a discount, we (they) may lose some customers directly.

In some ways it appers much like the old model of travel agent relationships and vouchers, where the hotel received the funds from the agent after the guest had stayed and submitted their voucher for payment through the accounts receivable process.

Hotel advanced booking/pre-paid rates are typically 10%-20% below BAR (Best Available Rate). These rates have always been an important strategy to put as much business on the books and to decrease cancellation rates plaguing the industry for years, reaching as high as 50% in some destinations.

I believe this is a positive step towards fair competition and gives hotels the freedom to create better pricing strategies overall. Savvy hoteliers will definitely drive stronger performance thanks to this, for the others this won't change much :) Now, let's not always blame the OTA for everything, if we really look at the NetRevPAR per channel, most hotels will be surprised to see that the NetRevPAR of the OTA is sometimes the highest one!

Great subject to discuss. The industry for too long has been a slave to parity agreements, and now the EC has created some breathing room for hoteliers to develop their own strategies as it relates to OTA's. It was almost like the tail was wagging the dog from a digital strategy and pricing perspective.

Good. High time. Most customers are price driven and want to get the best quality product at the best price. Where else should that be found, but with the producer directly? Put simply, there is no environment where it should be acceptable that the producer and provider of a product is forced to offer the same price to a third party that does not produce the product, and expects to profit from the same.

It depends. Smaller less complex hotels will be the first ones where there is no need for a revenue manager. Pricing and Inventory Management can be indeed fully automated. The role of a revenue manager already has evolved / needs to evolve to focus more on-demand generation.

Currently, doing research on the topic and most of the experts I talked to indeed think that the position of Revenue Manager will disappear in the next 5 years (replaced by AI tools and/or integrated with other hotel functions such as Commercial).

First thing I've done - of course- is ask Chat GPT. AI itself "believes" that it will not fully replace humans as It can not match human insight and intuition or adaptability to crisis scenarios, neither has interpersonal and leadership skills.

Wellness in hotels has become important due to a growing consumer demand for holistic experiences that prioritize health and well-being. This department can in some cases generate revenue for hotels similarly to F&B, however, the extent of this contribution is contingent upon factors such as the size and features of the wellness center and F&B and the type of destination.

The wellness travel boom is really shaking things up in the hotel business. It's not just a big deal; it's a whole new direction for the industry. Here at Catala Consulting, we've noticed that the integration of wellness into hotels isn't just a response to a passing trend.

Can wellness generate revenue the same way as F&B services in hotels? - Yes. Hospitality is a lifestyle industry- from its location, to its architectural design, to the services offered. In the United States, wellness is about a USD$450B industry (70% in product and 30% in service) and growing.

Do OTAs generate demand in hospitality. The short answer is no, but they can in limited conditions. In the business/group related traveler the answer is a harder no. Generally since the budgets and logisitics are more controlled.

Yes - in a way ...and No. Yes - in a way: OTA's, Social Media posts, destination marketing organizations, newsletters, and emails containing special offers, etc., all stimulate interest in leisure travel. OTA's are helpful during the planning phase since users can quickly compare prices and availability between various options being considered.

It is hard to argue with billions of dollars spent annually on marketing by the largest OTAs. One could certainly make the case that such a robust amount of travel-related content would spark travel wanderlust from even the most "home-rooted" consumer.