Revenue Survival: It’s Time To Get Smart, Agile & Efficient
By Gary Glodowski, Director of Customer Success at Duetto
A lack of resources, the need to predict the unpredictable, and then execute a strategy to it - these are the challenges faced by revenue teams around the world as we navigate through COVID-19.
I have been there. So have many of my team members here at Duetto. We have worked on-property and in cluster and senior executive revenue roles. We navigated through the 2008 global economic crisis, 9/11 and SARS.
And we understand the pressures:
- To owners and company executives ensuring that their assets remain profitable - not only in terms of revenue generation and heads in beds but also in making sure that revenue provides them with the ability to maintain the asset's value.
- To revenue teams to stick to strategy, regardless of the changing narrative from stakeholders, especially owners, who may be applying pressure to follow competitors on price, which only results in a race to the bottom.
In 2020, Revenue Management shifted to Revenue Survival. Our Pulse Report data shows that all markets are trailing, on average, between 50% and 70% behind STLY. The Skift Recovery Index, which Duetto contributes data to, is showing similar results, with a current index of 42 compared to a baseline of 100 for STLY.
Now is not the time to do things the way they have always been done. Now is a time for transformation. We are facing volatile demand and operating with leaner teams. The way in which we work and the tools that we use need to be fully optimized.
For Revenue Professionals to maximize revenue opportunities in this environment, they need access to complete, modern technology systems that are Smart, Agile, and Efficient.
Peak RMS performance is vital to survival. Hoteliers no longer have the luxury of relying on a system that is "good enough." Your RMS can no longer be seen as only for pricing or reporting - its financial projections are more relevant than ever before, and it provides a guide to operational expenses and provides insights into demand and risk. During these difficult times, it is the bottom line that ultimately matters in terms of ensuring survival.
Let's take a closer look at what it takes to be Smart, Agile, and Efficient:
Smart means using the right data, methodologies, and algorithms to quickly and accurately adjust your strategy to market demand.
Hotel teams across the globe are now sorely depleted, and the revenue department is no exception. However, the short-term nature of demand means that when a sharp incline does hit, it is often in the week for week. So if you did not see it or anticipate it, you are leaving money on the table.
Focus on channeling as much of whatever demand is in the market to your property.
It is now more critical than ever to use a pricing methodology that allows you to deploy rate strategies that are conditionally responsive and behave as though they are part of the living organism of demand.
Duetto was founded on Open Pricing - the only pricing methodology that lets you yield all segments, room types, and distribution channels independently and in real-time.
Smart also means having access to relevant and actionable data. If you are still looking at the same data sets in 2020 as you were analyzing in 2019, you are not seeing the true potential. The data you need has changed. Fewer people are booking airline flights, but a lot of people are hitting the road, so if you are still looking at airline data to map demand, you are missing a large part of the picture. This is just one example of quantifiable change.
Duetto references more signals of demand than any other RMS - not just from your PMS and website, but also from third parties like web shopping regrets and denials, booking and reservation data, reviews, and social media comments. This means your pricing recommendations are automatically attuned to demand fluctuations before your competitors have a chance to react.
Duetto is designed for real-time integration with systems across your entire tech stack. This ability to react in real-time is also more critical now and will continue to be hugely important when recovery picks up, and demand starts to change at an even more rapid pace. If your current RMS syncs only once a day, then you are operating in an outdated reality.
To be smart, you also need advanced analytics that enables you to see the full picture. When market dynamics become volatile, you can't rely on historical data. At these times, our forecast algorithm will automatically switch to generate a short-term forecast. It tells the system to ignore previous long-term data and enables revenue teams to focus on the exceptional events unfolding.
Agile means having flexible tools that enable you to pivot your strategy in line with real-time changes in demand.
Your usual segmentation may be no longer relevant in the current environment. Your previous segmentation probably took into account country of origin and booking channel. That might not be who you are selling to today.
Domestic tourism, drive-to markets, and extended stay options are pushing demand right now.
The flexibility of Duetto lets you adjust segmentation whenever you need, as often as you would like and without losing data.
Our new AutoPilot Schedule feature, which will come out with our Fall Release at the start of September, is a great way to easily segment and then re-segment your business, put in new pricing rules, and optimize on rate using controlled automation.
For example, if you want to run fenced discounts as a way to lower rates that are both incentivized for the customer and the business. Having discounts on advanced purchase or length of stay offers, and tailoring cancellation, and deposit policies to the current climate, are some ways to package those fenced rates. You will be able to put out an attractive offer targeted to a specific audience while also maintaining some level of integrity with your public-facing price.
Using AutoPilot Schedule in Duetto GameChanger, you can build in these pricing rules and toggle automation on and off for these segments. This makes it quick and easy to change your strategy. And as recovery comes, it will be those hoteliers who are nimble and create hyper-responsive pricing strategies that recovery quickest, and most profitably.
Agility is also required internally. We mentioned the challenges of getting stakeholders on board with your strategy. It can be difficult at the best of times, but when stress levels are high, it can be even harder. Decisions are made quickly, and results are needed to back this up.
At Duetto, we also want senior executives, stakeholders and owners to have more confidence in the Revenue Strategy being served by their teams. Our new ScoreBoard Custom Reporting feature will help organizations to allay fears by being able to build custom reports and make them available to your entire team in minutes. This helps your teams align on what's important for your business in real-time, no matter how often it may change.
In these challenging times, technology offering on/off automation, which once could help you be more efficient, is now redundant. Revenue managers need more control of their systems than an on/off black box automation that makes decisions for you.
If your RMS automation can only be ON or OFF, you are being asked to give up control at a time when the risks are simply too high. We believe that efficiency shouldn't require a blind leap of faith. Duetto is the only RMS that makes you faster without forcing you to sacrifice control over your rates and strategies. We call it Controlled Automation.
Many of our latest features were built with Controlled Automation in mind:
- AutoPilot Schedule is one of the newest features to help hoteliers automate while remaining in the driving seat.
- Min/Max bounds lets revenue leaders ensure that rates are never yielded above or below the rates appropriate to their brand, property, or location.
- Enterprise Rate Guidelines lets revenue leaders build out and deploy multiple strategies in minutes. For example, one strategy may be for your currently closed hotels that focuses on future demand, and another for a soon to open hotel that focuses more on the here and now. And then you can toggle these strategies on and off as the status of your hotels change. This enables you to be agile and adaptable to the market and it keeps you efficient. One person can create, own and run these various strategies.
- ScoreBoard Forecast Builder enables you to build a day-by-day forecast in minutes. It's the fastest forecast builder in the industry. The SmartSpread technology that powers Duetto ScoreBoard allows you to set a month-level forecast for every segment, then create a custom forecast for each day.
Together, these tools enable revenue professionals to optimize using controlled automation, which they can flex on and off for different segments or booking rules, helping them be both smart and agile in adapting to the changing market and consumer confidence, and remain efficient, as they can focus attention on the segments that most need it, safe in the knowledge that other areas of their strategy are being optimized in real-time.
By being Smart, Agile, and Efficient, revenue teams can ensure they get more than their fair share of demand in the market
Gary GlodowskiMore from Gary Glodowski
Duetto delivers a suite of cloud applications to simplify hospitality revenue decisions and allow hoteliers to work smarter, increasing organizational efficiency, revenue, and profitability. The unique combination of hospitality experience and technology leadership drives Duetto to look for innovative solutions to industry challenges. The software as a service platform allows hotels and casino resorts to leverage real-time dynamic data sources and actionable insights into pricing and demand across the enterprise. More than 4,000 hotel and casino resort properties in more than 60 countries have partnered to use Duetto's applications, which include GameChanger for pricing, ScoreBoard for intelligent reporting, and BlockBuster for contracted-business optimization. Duetto is backed by investors Warburg Pincus, Icon Ventures, Accel Partners, Battery Ventures, and Spectrum 28. For more information, please visit https://www.duettocloud.com/.