Finance

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.