David Collins

Preparing for the Up-Turn

By David Collins , Co-Founder and Chief Operating Officer for The Great National Group

As we begin our 11th year supporting hotels throughout Ireland the UK to achieve their rooms revenue potential, from a very early stage, here in Great National we realised that whereas what we do works and works very well, growing our client base was in fact constrained by the lack of investment in tech within the industry. As a result, our yielding processes and systems whilst very effective were overly manual. This can be said of the industry in general.

The challenge we had in essence was how to scale our business at pace. Again a challenge for every independent hotel operator.

So early on we looked at various off-the-shelf systems to help us to automate whilst continuing to enable our clients to weaponize their pricing and channel mix. The common denominators of what we looked at were pretty startling: lack of integration across systems, most were at best blunt instruments when it came to managing rate; and all were extremely costly. And this is still the case today.

Having waited until the tech was sufficiently advanced, we set about developing our own yielding/distribution platform and with the continued help and support of Enterprise Ireland, we’ve developed our revenue management tool, Revanista.

In short, Revanista is now enabling hotels to re-engage with their customers whilst reducing costs and driving room rate.

Proof of the Pudding

Looking back at 2020, undoubtedly this was a difficult and troubling time for hotels and the wider travel and tourism industry. To say that it was unprecedented would be an under-statement.

And yet here in Great National, our online direct revenue performance for our Irish hotels’ websites matched almost exactly that of 2019 .. despite the reduced season. ABV and LoS increased 27% and 12% respectively while in the UK, our clients’ online revenue grew by a massive 35% YoY, ABV by 36% and LoS increased by 12%.

Admittedly, there was huge pent-up demand amongst consumers however bear in mind that the only real show in town was the staycation market so no group business, no tours, no corporates … This performance was largely achieved therefore by proactively and forensically managing our hotels’ digital, distribution and rate strategy.

It is reasonably expected that something approaching ‘normal’ trading will return in Q2 2021 and therefore the next 3 months will continue to pose significant challenges for hotels and indeed the wider economies of both Ireland and the UK.

Despite the constant stream of bad news and seemingly never-ending portents regarding the ‘end of the world as we know it’, operators need however to maintain a measure of pragmatism and dare I say it, optimism. And they need to prepare for the up-turn.

In essence, we’re currently in what is already traditionally a challenging season for hotels, the dreaded ‘off-season’, and most regional hotels at best would be trading on a shorter week in any case. Little or no comfort admittedly but you should nevertheless strive to ensure some level of continuity in your business and whereas it may not be possible to trade, it is vital that you sustain your hotel’s visibility so that when there is a pick-up – and there will be – you are in poll position to take advantage of this.

Direct vs. Indirect

One of the biggest changes the industry has seen over the course of the last 9 months has been the re-calibration of direct vs. indirect, OWS vs. OTA.

Covid is impacting everyone including the big OTAs: Booking.com announced a 25% cut in its workforce while Expedia announced similar moves plus a pull back on its meta-search activity. Furthermore we are definitely seeing a switch to direct amongst consumers – perhaps as people are staying local they’re also shopping local – which is good for hotels as this channel has a far lower cost of sale.

To be clear, OTAs are an essential part of any hotel’s distribution mix: love ‘em or hate ‘em, 3rd party agents can provide brand reach that independent hotels would be unable to achieve and are therefore a critical element in the overall digital eco-system. That said, as OTAs pair back their presence in the market – this does leave hotels with less competition for Page One rankings and therefore now could be the right time – counter-intuitive I know – to invest in increasing your online visibility to drive more direct business.

Tips for the Up-Turn

So what can hoteliers do to prepare for the up-turn? Here are a few pointers: 

  • Re-align your yielding to allow late pick-up
  • Recalibrate your channel mix
  • Renew your focus on direct
  • Encourage repeat/referral
  • Review your website content, watch your PPC
  • Avoid ‘Bucket Shops’ as in junk deal sites
  • Manage your cost of sale
  • Implement s flexible cancellation policy
  • Monitor your competitive set
  • Twice-weekly analysis of pickup, drop-off, pacing, etc.

And one final tip. Seriously consider a revenue management tool.

With Revanista, we’ve democratised the technology around rooms revenue yielding, making it available to everyone from enterprise level operations to ‘mom and pop’ guesthouses. And at a much more accessible price. 

Another consequence of deploying Revanista is to reduce not just pricing and inventory errors but also to reduce the amount of labour required to manage yielding. Literally thousands on inventory changes are being implemented daily by the hotels using Revanista which simply wouldn’t possible if these same hotels were manually yielding.

.. Food for thought.

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