The Transformation of the Hotel Industry from Art to Science
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Transcript of The Transformation of the Hotel Industry from Art to Science
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The Transformation of Hospitality from Art to Science
Robert A. Rauch, CHAHotelGuru.com
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Factors of the Transition from Art to
Science
Revenue Management
Distribution Channel Management
Reputation Management
Social Media Marketing
Web 2.0
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Revenue Management is the set of techniques that determine which
reservation request to accept and which to reject to optimize revenue
Hotel Pricing
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Revenue Management
Manage OTAs
Packaging
Risk factors
Evolving traveler
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Today, it is time for the industry to price based on value perception and
not just price relative to a competitor.
Understanding the true demand in a marketplace is quite scientific.
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OTAs
GDS
Hotel Direct
Voice
Hotel Website
Social Media (the new
player)
Distribution Channel Management for Driving
New Revenue
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Reputation ManagementTravelers’ ability to access social networks anytime, anywhere
empowers them to create and consume more content than ever before
70% of travelers make decisions based on reviews and responses on review sites.
Photo: hospitalityformulaconsulting.com
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Social Media• Capitalize on guest created content
• Create a virtual concierge through the property’s website or other digital app
• Implement concise and impactful videos to enhance dramatic imagery
• Utilize content marketing and real-time marketing
90% of travelers trust recommendations from their friends and family more than any
advertising
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Consumer BehaviorA = B x W x N
A- Attitude toward the business
B- Belief of a consumer that the business possesses
a particular desirable attribute
W- Weight of importance of the attribute to the
consumer
N- Number of attributes important to consumers
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Science of Marketing
• Digital marketing• Mobile• Real time marketing
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Digital MarketingDigital marketing is the use of digital sources based on electronic signals like Internet, digital display advertising and other digital media such as television and radio.
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Mobile
47% of travelers research options using their mobile device
31.6% will actually book their travel on a mobile device
Photo:Marriott.com
Mobile is the new “walk-in”
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Real Time Marketing Real time marketing (RTM) isn’t planned, it just
happens
NASA’s Tweet During the Oscars Oreo’s Tweet during the Super Bowl
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Utilize Facebook apps to highlight unique features
Feature guest generated content Guest should be able to communicate with
property Video campaigns generate guest engagement
Real Time Marketing
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Millennials
Expectation of more international
visitors
Booking more profitable business
Innovative technology
Sharing economy/Disruption
Today’s Top Hospitality Trends
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Party for one, but hanging out together Fastest growing segment Special designs with Millennials in
mind Will turn to social media to voice
opinion Lack loyalty
Millennials
Photo from Nytimes.com
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Chinese Travelers 2015 and Beyond
Visa Waiver Program
Longer stays
Spend more money
Mandarin Chinese is the most spoken
language in the world
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Booking more profitable business
• Improve distribution channel mix• Less reliance on relationships with OTAs• Content is King• Provide WOW customer service
Photo: investingtrack.com
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Copyright 2015 R.A .Rauch & Associates
Threat of New Entrants
Bargaining Power
of Buyers
Bargaining Power
of Suppliers
Threat of Substitute Products
RivalryAmongExistingFirms
PORTER’S FIVE FORCES
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The hospitality industry is no longer an Art,
are your strategies in line with hospitality as a science?
Read more on the transition of the hospitality
industry from an art to a science here
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Thank You
@truehotelguru
HotelGuru.com
CEO, RAR Hospitality