Hotel Industry Concerns and the Copy-and-Paste Effect

I have taken a period of relative disconnection. The truth is that certain professional priorities have not allowed me the time needed to give these pages the attention they deserve. Now that my work rhythm has been restored, I am in a position to return to activity. I apologise for disappointing anyone who, during this period, may have hoped that I would never return to these parts. By way of summary, I would like to share some of the concerns I perceive in the hotel sector through the conversations I have with many industry professionals every day. It is abundantly clear that there is no room for forecasts in the current landscape. It is frustrating to see how the results hotels achieve day by day follow no logic or pattern. Average rates are not what we expected them to be, nor are average lengths of stay, nor is booking lead time. It is clear, then, that nothing is turning out as anyone expected, and whoever says otherwise is simply lying. This creates concern and a sense of powerlessness, given the limited scope hoteliers currently have to influence demand and interact with guests in order to make attractive offers that allow them to exercise some degree of control over their distribution system. Even lowering prices is no longer a solution, as demand is not responding sufficiently to expectations, because it either does not exist or is negligible. When hoteliers turn to their usual distributors—central reservation systems, OTAs, and so on—they realise that these partners are themselves engaged in strategic processes, in other words, trying to keep afloat, and are unable to provide answers in the form of bookings. Other distribution parasites that have managed to position themselves on their backs, charging commissions or fees for any action hoteliers take to enhance their website—where they have managed to convince them to install their booking engine—are in better health. Yet they will remain parasites until hoteliers themselves one day have the resources to get rid of them. Then it will be a different story. Moreover, amid all this confusion, poor hoteliers are told in the news and at conferences that the solution lies in innovation—but innovation in what? Nothing less than using social media and even creating their own network. For heaven’s sake, when they do not even have reliable information in their own systems that would enable them to understand their customer base and undertake relationship marketing initiatives with their hotel guests. They do not even have the tools, such as analytics systems, to measure the return on anything they do, nor do they have the arguments to challenge a given distributor over the reasons that lead them to terminate a contract. I believe hoteliers have many concerns today. Nevertheless, I do not think it appropriate to conclude this article without offering, based on my experience, a few ideas that can make a difference:

• Do not apply pricing policies based on what the competition is doing. This can be tricky, as each hotel’s selling rates must be calculated based on its day-to-day results and the achievement of its individual objectives. If the results and objectives of two competing hotels are not the same, neither should their selling rates be.
• Not all distributors add the same value to distribution. The value of each distributor should not be measured according to its sales potential, but rather according to its sales potential in specific markets, its market share, the cost of intermediation, and the opportunity cost of not doing it directly. This argument may be valid for challenging rate parity.
• Offers such as 4×3 or advance-purchase discounts for bookings made X days before arrival do not work in the same way for every hotel. Let us not be driven by impulse or by an intermediary’s advice. We could be cannibalising our own demand. First, we should look for behavioural patterns among our guests and see whether it is better to apply a 4×3 offer or perhaps a 6×5 or 3×2 offer—who knows? Every hotel has its own pattern, and we should not apply discounts to patterns we already have. Likewise, there is no point in offering advance-purchase discounts for 30 or 45 days if our pattern already shows a demand peak during that period; it is worth considering 60 days, regardless of what the competition is doing.
• If distributors are not meeting our expectations, perhaps we should start thinking about doing it ourselves.

I do not know; we could talk about this for hours and hours. The point is that everyone must consider whether it is worth doing, or whether it is better to waste time on social media. This is innovation; the rest is nonsense.