Hotel Growth & Asymmetric Bets

I hope that you're enjoying the newsletter. I firmly believe that the integration of strategic sales and marketing concepts into a hotel's business plans can significantly enhance its overall performance. However, this can only come to fruition if Hotel Owners, Operators, and Marketers engage in open conversations and appreciate the symbiosis required. To accomplish this, it is vital to speak up share, and exchange information for a nuanced understanding of the topics and mutual appreciation.

When it comes to sharing knowledge, having a solid structure or framework is crucial. Among the various frameworks I've read, this one is inspired by the four-pillar hotel growth framework taught by Hotel Growth Gurus. Even if you're already familiar with these concepts, I have always believed that reading will always complement hard work in this challenging industry,

Here goes : the four pillars of the Growth framework.

1. PERFORMANCE EVALUATION/ STRATEGIC HOUSEKEEPING

When it comes to strategic housekeeping, it's crucial to understand how the game has changed and how to position your hotel effectively in the digital economy and leverage the rapid changes to your advantage using a combination of traditional and Asymmetric models.

2. FRONT DESK FOCUS /HOTEL MARKETING

All about online visibility and how it affects your hotel's success on different channels. Ill be sharing some general articles KPIs and knowledge & strategies ive gained related to acquisition, retention, development, sales, from various sources all with an eye toward increasing your hotel attraction, retention and ecommerce.

3. RM PLAYBOOK

Here we'll delve into the profit multipliers that drive higher occupancy rates and explore some best practices and articles behind dynamic pricing and distribution.

4. PROJECTS AND PROGRAMMES.

Templates / Insights on utilizing program management techniques and relevant templates that can fortify these three pillars.

CONTEXT - THE GAME HAS CHANGED -

Lets just step back for a moment, Things have changed significantly in the travel industry over the years. The shifts include the move to internet-based search, real time single window distribution and changing revenue management dynamics, the emergence of social and user-generated content, the explosion of new devices and technology like Web 3.0, Generative AI, and Virtual reality, and the convergence of all these into a massive pool of analytics, performance KPIs and evolving organizational structures.

In light of these changes, it is unrealistic to keep all plates spinning at all times. Hence, we will write about different points / used cases that align with one of these three pillars, as "everything" is essential in the travel industry, and dropping the ball on any aspect of sales, marketing, service delivery, or management is not an option, I will cover different topics one by one.

PERFORMANCE EVALUATION / STRATEGIC HOUSEKEEPING

Strategic Housekeeping is comparable to analyzing business models, patterns, and innovations through a Business Model Analysis. Utilizing a reliable business model canvas as the primary tool for this analysis is crucial.

At the 0 position One of the key components of hospitality demand generation is Earned media check out the TRIFECTA OF DIGITAL MARKETING. It has been found that earned media alone contributes to 33% of this process. Therefore, it is important to analyze earned media like TripAdvisor. Also its crucial not to overlook the significance of long tail reviews (all channel that your reputation tool covers), which extends beyond Google and TripAdvisor

That apart here are top 5 KPIs that should be part of 3 year Strategic Housekeeping (Backward and some cases forward analysis)

1. SWOT (all of them : Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Distribution, Resources, Opex to Revenue ratio).
2. ADR / MPI / ARI/ REVPAR / RGI, read more about this on STR
3. EBITDA
4. Pace to Budget (Historical and fwd looking)
5. Year-Over-Year (YoY) Absolute Performance Marketing Parameters (CPI, CPR, CPA CPM, Organic) AND yes every channel counts
6. INTEGRITY TEST IN CONTEXT OF KPI I came across "Integrity Test," from the HSMAI KPI table. An integrity test refers to the potential manipulation of KPIs to achieve a desired result. For instance, choosing a certain comp set could significantly alter your RGI and falsely position you as the leader, which is considered a manipulative practice. Similarly, in a marketing context, selecting easy goal conversions rate could greatly distort your GCR /Goal Conversion rate and lead to misleading results

Although you might think these are fundamental, We all know that the success lies in paying attention to the finer details. By mastering these, one can uncover innovative solutions to problems.

The Asymmetric Bet?

"Marriott's decision to build its own media network is a smart move in today's market where brands rely on primary data from direct customer interactions to drive business growth. With GDPR compliance looming, many hotel companies could have taken advantage of this opportunity when DSPs were under pressure. According to a study by Insider Intelligence, net ad revenues for retail media advertising in the U.S. are predicted to rise from $41 billion in 2022 to $60 billion in 2024. By refining this data with algorithms, Marriott can monetize it through advertising revenue. To me this was not an outlier move, it was easy picking, Hotels could have easily learned from Google (& facebook ) search advertising models, i.e. where user data is being cloaked & monetized, - not the user/ customer just the data. To me, this represents a scalable, asymmetric revenue model that is data-driven, customer-agnostic, and results from strategic housekeeping.

I think that two factors play out in this context.

1. Determining the position of your business in the roadmap (?company’s competitive advantage?which is created through a series of unique competencies /org capital vs market opportunity).
2. Assessing your personal risk appetite to ascertain if an asymmetric model can be proposed / adopted / delivered at the current juncture.

What sets the best and businessmen apart is their ability to stay attuned to how the industry is evolving and to have their "soul in the game" that makes them look for asymmetric outcomes, The question is do we possess the personal risk tolerance to take a chance and try something radicle and new by putting ourselves on the line?

P.S Personal views and opinions only; not official stance of any company or organization