Let's talk about hotel technology

This is precisely HotelsDot's philosophy; to create a relationship of trust with its customers: "If they win, we win. Simple, isn't it? Today, they are a benchmark in the sector and continue to grow from their headquarters in Barcelona all over the world.

We talked to Sònia Molina about hotel technology and Revenue Management.

You have recently been appointed CEO of HotelsDot. Tell us about how this change has gone after many years as Director of Revenue.

Quiet, very quiet. Sonia Barberán Genloch had already been part of the management team for a few years, and with the promotion of Patricia Jiménez as the new director, one of our best Senior Revenue Managers, with a very long career at Hotelsdot, the transition has been very easy.

The truth is that our clients and the industry in general have also made it very easy for me. I have received so much love and compliments that I am still surprised and, of course, grateful.

2. Tell us a little about HotelsDot . What defines your way of working and how does it differ from other Revenue Management companies?

I personally believe that Revenue Management is more of a profession than a theoretical knowledge, and as in any profession, experience and practice is a degree.

HotelsDot is one of the Spanish outsourced Revenue Management companies that has been in the market for the longest time. We have managed more than 250 establishments, from 5* luxury hotels to campsites, and in very different locations. This experience has allowed us to develop a professional method in the application of Revenue Management and Marketing techniques that guarantees that any property can obtain the maximum possible benefit offered by each market.

Many theoretical references to Revenue Management refer to the heuristic method of gaining knowledge based on "trial and error". HotelsDot has 17 years of experience and as many years in other prestigious hotel companies, so we have already made all the possible mistakes... ?

In addition, the vision of our clients also helps to differentiate us from other revenue outsourcing companies. We firmly believe that working together (as a team) with them is one of the keys to our results.

3. Let's get down to business... What does a hotel need to obtain good results in Revenue?

Hiring a good Revenue Manager or a good outsourced Revenue Management team, whichever is more profitable for the establishment. It's all a question of crunching the numbers!

Revenue Management is not a cost, it is an investment.

4. How can a small independent hotel or a small chain create a good sales strategy if it has little budget to invest in Revenue Management?

The first thing is for an expert to evaluate the room for improvement that the establishment or chain has. As you say, Revenue Management is not a cost, it is an investment. If by hiring a good Revenue Manager you can improve your revenue by 50,000 euros and the service costs you 20,000 euros, the profit will be 30,000 euros. Even if you increase your budget by 20,000 euros, the important fact here is that the total benefit will be 30,000 euros more than you had before.

So far we have not managed any establishment that has not improved sales with our collaboration enough to not be able to cover our cost. In addition, we have to take into account the savings of many hours of work of your staff in the daily tasks applied to marketing, management of technological tools and Revenue.

Professionalisation and specialisation is a degree and means higher profits.

5. What do you think about the idea that all hotel staff can be Revenue Managers?

Revenue Management is a work philosophy and, like any philosophy, all departments must work in the same direction: to obtain the highest possible profit. However, there must always be a leader and this leader must have sufficient experience to be able to design the right sales strategy, and not all hotel staff have this experience.

Our daily work goes far beyond what we have always been thought to do: changing prices according to the pick-up and the competition. As a result, professionalisation and specialisation is a degree, and this translates into higher profits.

6. What technological tools does a Revenue Manager need to work with guarantees?

Right now we must focus on the digitisation of processes. Technology is fundamental not only for optimising results, but also for saving time. In the past, we had to spend many hours collecting data and implementing sales strategies. At the very least, in order to implement a professional revenue management we need:

• A good PMS that provides us with the correct data for each booking in order to be able to analyse all the variables involved in RM.
• A good Channel Manager that allows us to distribute the inventory in the most profitable way possible.
• A good booking engine that allows us to apply all the sales rules applied by the different OTAs, that has a good conversion and usability for the client in order to reduce intermediation as much as possible.
• And finally, a good RMS that collects all the data from each of the bookings sent by the PMS and provides us with clear and concise information on all the variables necessary to make the sale profitable.

At HotelsDot we work with Revenue Control Data, it is an RMS, which is born from the hand of active revenue managers, so it covers all our needs and, most importantly, evolves with them.

It offers us a 360-degree view of all the properties we manage, detailed information about the location and our competitors. Another of its functionalities is the dynamic pick up that allows us to change the anticipation and recalculate it in a second with 4 different distance points, either by room type, by channel or by segment, it allows us to set daily objectives and by market segments to know where we are at any given moment.

7. When you do a revenue management analysis, what influences: city demand, competition, flights, etc.?

For the analysis and achievement of revenue, there are five key variables from the analysis of which the optimisation of the technique is derived: capacity, customer, anticipation, booking conditions and price.

In this sense, and as I have already mentioned in previous articles, it is necessary to bear in mind that, although these variables have not changed over time, we should not only focus on the study of the pick up (city demand, flights), sales history or competition, we must complete our analysis with other more specific analyses, such as for example:

• Capacity: "Yieldable" prices in different typologies: the objective is to be able to raise the price of only one typology without the need to raise the rest or, the other way around, depending on the pick up and the demand forecast for each of them.
• Customer: Choosing the right mix of sales channels and distribution strategy for each season so as not to cannibalise direct sales but also not to penalise volume.
• Anticipation: Working in anticipation will provide us with the best possible average price. Knowing what the anticipation is for each period and where the peak of sales is will help us to be able to sell the maximum possible inventory when demand is willing to pay more.
• Booking conditions: Adapt booking conditions according to market and season.
• Pricing: Pro-active vs. re-active strategies. Do not get carried away only by the pick-up and competition, work on sales patterns and anticipate the movements of the competition.

8. When creating annual objectives for hotels, what do you think should be taken into account?

• Sales history.
• Margin for improvement in the different variables mentioned in the previous question.
• Analysis of demand in the market place and important events (Hot days).
• Analysis of customer behaviour patterns in the different seasons/days.
• Competition.

9. What new developments do you have planned for 2023?

We have just launched an hourly consultancy service that is working really well.

We offer hotels a fine-tuning of their revenue after a previous audit. The objective is to detect the points of improvement and support them in the process of redefining the strategy, which also includes everything related to technological tools, since, on many occasions, we have verified through our experience that the existence of integration problems or problems with the initial configuration are the cause of not being able to optimise their use.

On the other hand, we are also starting to work on a basic Digital Marketing service exclusively for our clients. Just as Revenue and technology must go hand in hand, Marketing and Revenue must be perfectly coordinated. Let's not forget that the starting point for a good direct sale is not only to have an optimised website and a good booking engine, but the most important part is to establish a correct marketing that does not cannibalise your direct sale, and that part is the direct responsibility of the Revenue Manager.

For 2023, I would highlight digitalisation and professionalisation as major challenges to be taken into account.

10. What do you think awaits the hotelier this year and what will be the main challenges?

I don't know what the main challenges are going to be, but the ones I personally think should be digitalisation and professionalisation.

11. What are your forecasts for 2023? Do hotels follow a pattern of advance bookings similar to previous years? Would you compare it with any other year?

The anticipation of these last months of 2022 is getting quite close to the patterns just before the pandemic. The sales forecast will depend a lot on each of the places where the properties are located, but in general terms we believe that 2023 will be very similar to the results of 2019. Where we are finding differences with respect to 2019 is in the booking conditions, the client continues to give importance to flexibility so we will have to be somewhat more flexible in the booking conditions.

A final thank you to Sònia Molina and the HotelsDot team for taking the time to analyse with us the current Revenue Management landscape and what lies ahead in 2023.