Aman Group, which operates some of the world’s most expensive hotels, secured a $360 million investment from a group including a United Arab Emirates wealth fund and an investment firm backed by an influential member of that nation’s royal family.
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. Over the last 2 years we saw an increase in OTA share vs direct or brand bookings. This seems to indicate that while most brands halted or delayed marketing spend as a way to preserve cash, OTA's were able to take advantage and sway a customer to book on their site instead. Certainly, there may be someone who sees an OTA's commercial on their TV or device and is inspired to plan a trip they previously were not considering taking, but in reality, they were likely already in the mindset of traveling and inspired more by the featured destination than the concept itself. A person who was thinking of spending winter in Hawaii may see an ad for a resort in Costa Rica and consider a change of destination, but they were already in the cycle of planning a trip, even if in the earliest of stages. Or if not a Brand Loyalist, a consumer might see a featured discounted offer from an OTA and perform a search on their site to compare rates, but this does not constitute generating new demand. A more likely source of organic inspiration in today's purchaser base is social media. As the saying goes, "A Picture is Worth a Thousand Words", and in this case, potentially millions of new travelers.
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.
Prime office rents in Riyadh have growth by 13% over the last 12-months, fuelled in part by the looming Regional HQ Program deadline, which goes into effect in January 2024, according to global real estate consultancy, Knight Frank’s Summer 2023 Saudi Commercial Market Review.
To prove a point, I asked ChatGPT to write an article supporting technology, see below.
In today's ever-evolving world, the hospitality industry stands on the brink of a new era of technological advancement. While some may argue that my perspective as a technology Product Manager is biased, it is important to recognize the tremendous benefits that these advancements can bring to all stakeholders involved.
Obviously a blessing. In hospitality, we are with one foot in legacy and one foot into the future. We need more exponential technology development to liberate team members from mundane, repetitive, and 0 value add tasks. We should have been further away already.
Its a double edged sword. Community driven can lead to building everything for noone. My viewpoint, and having my own technology company, is that you need to solve an issue at hand. Sort the issue and then you can gather user feedback to make it more efficient - ie less clicks to get to the result, different colors, visualisations, etc.
Technology, such as attribute based selling (upselling) has been talked about for many years, software companies have tried and optimized it for real release for a considerable amount of time, minimizing the user "optimization" afterwards.
Predictions are always tricky, especially when they are about the future.
Unlocking human potential in revenue management is going to be the key to driving growth and success in businesses going forward. For too long we are telling hotels to always look at that cool "artificial intelligence (AI)" and how the human is more of a burden than an uplift. I believe this will change. The future of revenue management is human-led, not AI-led, and businesses need to embrace this shift in order to stay ahead of the curve.
Making Attribute-based Selling (ABS) and upselling a reality! Is mine and ROOMDEX's 2023 resolution! Attribute-based Selling (ABS) re-imagines hotel inventory merchandising in order to improve guest satisfaction and generate greater hotel revenue.
Challenging to predict given the current VUCA environment, but since "we've come to play" typing here, I would say 2023 will show a more thoughtful European customer, looking more into the rates and offers, and not as splendid as they were in 2022, when they blew the savings of two years of no travelling.
I believe that if we don't figure out how to utilize ChatGPT AI in our workflows for revenue and profit optimization in 2023 - we will have wasted a year.
The question is, should hoteliers allow OTA customers to "trick the system" and allow group bookings by enabling multiple reservations for same stay period by the same customer. The question of group reservations is more important than ever since group demand - both corporate and SMERF - is expected to bounce back in 2023.
An interesting "dilemma" and an indication of the state of the relationship between hotels and OTAs, when we discuss whether getting a certain form of business is good for both partners.
I am of the opinion that guests (and groups) should be able to book the hotel on their preferred channel. As it is mentioned in the intro, apparently OTAs already enable group bookings in some way, of course one can blame the OTA for this, but the fact that it is happening clearly shows there is demand from guests and groups to book via an OTA, most likely because it is easier.
This does not surprise me to see this trend. It could be an indication of one of two things. One, they percieve that the best deal to be had is through the OTA site. Secondly, the convenience factor of booking and managing without having to speak to anyone and deal with deposits, cut-offs, etc.
The answer is simple: only if it generates incremental revenues. What's not simple is differentiating between incremental and displaced. The Revenue Management discipline in our industry hasn't yet evolved to the point that would allow to find reliable ways to calculate those.
The reason we qualify a reservation as a "group booking" is because the number of rooms booked requires special booking conditions to be applied by the Hotel, to prevent the risk of incurring massive revenue and profit loss for late cancellations of the bulk of rooms that cannot be replaced to the last minute.
Klaus Kohlmayr, Chief Evangelist & Development Officer @ IDeaS estimates that a typical hotel has to make roughly five million pricing decisions every year and that it is not humanly possible for any revenue manager to get every decision right, every day, without the support of an automated system like a Revenue Management System (RMS). Yet, less than 10% of independent hotels have an RMS in place.
In the next five years, the world will have increased its data from 36 Zettabytes to 163 Zettabytes. How much data is that? If a byte were the size of a grain of rice, 163 zettabytes would fill 163 Pacific Oceans! That's a massive amount of data. The hotel industry is not immune to that deluge, and revenue managers everywhere are faced with the challenge of dealing with it. Here are three recommendations:
In economics, one of the most well-known concepts is the Law of diminishing returns. What the law states is: As an investment in a particular area increases, the rate of profit from that investment, after a certain point, will decrease. Translated in Data analysis, one does not need to have 100% of the information to make the right decision.
More than ever data is available to help shed light in dark corners and to support making high impact decisions. When all goes well revenue managers will feel armed with the right data to check assumptions, gather insights and align teams towards profitable outcomes. With the quantity (and quality) of data sources increasing it can get daunting though.
Tipping from data-driven decision-making into analysis paralysis is common, but not unavoidable. As Scott’s original post says, having a strong filter on what NOT to analyse is important. Here are some other lessons we’ve learned in helping hoteliers navigate the world of data and insights.