The Revenue Matters Team made its annual appearance at the HSMAI Revenue Optimization Conference (ROC) in Orlando, FL on June 29, 2022, and brought back some key takeaways:
The fate of the travel industry, although improving, remains uncertain—with the rise in gas prices, cost of airfare, increasing interest rates, and continued labor shortage.
- With gas prices reaching historic highs across the US, summer travel is feared to be significantly impacted, but experts do not believe that is the case.
- People are not as resilient to rising airfares, up 26% since the beginning of the year, but consumers have been poised to withstand the sticker shock, leveraging their savings from pandemic-era stimulus funding and increasing wages that have been able to outpace high rates of inflation.
- The overall economic outlook is quite an unknown, with significant interest rate increases looming from the Federal Reserve. Increasing interest rates is one major way to combat ongoing inflation.
- The labor environment, with continued low unemployment and high wage growth, is another element to contend with, as the outlook has been improving marginally. Many are seeing the labor force participation rate rise, but most likely will not get back to where it previously was pre-pandemic.
Revenue managers should be proud of how far the discipline has evolved since the last downturn and how room rates have led the way in the recovery. ADRs have been averaging double-digit increases every month throughout the entire year of 2022, keeping the industry above water as overall demand is still lagging.
Hotel demand growth also has been robust, but early returns so far this summer show a slight cooling of demand growth, which can be attributed to airline capacity issues. It is most likely that demand will not return to 2019 levels until Q4 2022 or Q1 2023.
Google Travel is creating new ways to get in front of customers. Brand Metasearch Ads allow you to shift share and reduce marketing costs while Non-Brand Metasearch Ads allow you to introduce your property to new customers.
To communicate with impact, what matters most is: Vocal 38%, Visual 55%, Verbal 7%. For leadership presence: 1. Connection – Eye Contact; 2. Energy – Posture, Movement, Gestures, Expression, Voice; 3. Credibility – Pause. Be Conversational, not scripted. Make your message Clear and Compelling, Bottom Line Up Front (BLUF), Use plain language, Know your audience. Consistent action creates consistent results.
Revenue managers should explore/consider the future of revenue management, which focuses on all potential revenue streams for the guest stay, not just room revenue.
- Revenue management is overdue for a change. Revenue managers still spend 51% of their time on non-revenue generating activities—we need to restructure tasks to spend more time where it matters. Leaders need to lead by example and, alongside their revenue managers, continue to advance their skills by reading more on all impacting areas and furthering their knowledge in the trade.
Within digital marketing, there are three primary areas of marketing—owned, earned, and paid media. Each brings different value to the buyers’ path to purchase or marketing funnel. Owned is built for long-term results because it takes time to scale, Earned has the most credibility and least control, and Paid is for short-term results and is ideal for creating awareness at the top of the funnel. Know your “golden metric(s)” and work to improve it (Website, Search, Booking Engine). Most social platforms reward comments and shares. Always have a call to action in your posts—ask for comments or shares.