The Transformation of the Hotel Industry from Art to Science

The Transformation of Hospitality from Art to Science

Robert A. Rauch, CHAHotelGuru.com

Factors of the Transition from Art to

Science

Revenue Management

Distribution Channel Management

Reputation Management

Social Media Marketing

Web 2.0

Revenue Management is the set of techniques that determine which

reservation request to accept and which to reject to optimize revenue

Hotel Pricing

Revenue Management

Manage OTAs

Packaging

Risk factors

Evolving traveler

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.

OTAs

GDS

Hotel Direct

Voice

Hotel Website

Social Media (the new

player)

Distribution Channel Management for Driving

New Revenue

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

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

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

Science of Marketing

• Digital marketing• Mobile• Real time marketing

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. 

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”

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

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

Millennials

Expectation of more international

visitors

Booking more profitable business

Innovative technology

Sharing economy/Disruption

Today’s Top Hospitality Trends

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

Chinese Travelers 2015 and Beyond

Visa Waiver Program

Longer stays

Spend more money

Mandarin Chinese is the most spoken

language in the world

Booking more profitable business

• Improve distribution channel mix• Less reliance on relationships with OTAs• Content is King• Provide WOW customer service

Photo: investingtrack.com

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

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

Thank You

@truehotelguru

HotelGuru.com

CEO, RAR Hospitality