W e l c o m e t o y o u r f u t u r e

HSMAI Washington DC Chapter ProgramBy the Institute for Hospitality & Tourism Education & Research & HSMAI

W e l c o m e t o y o u r f u t u r e

Opening Presenters

Karen Wollard, Ed. D.,Associate Director, Professional & Continuing Education,

The Institute (IHTER) at the Chaplin School of Hospitality

and Tourism Management

Fran BrasseuxExecutive Vice President, HSMAI

Executive Director, HSMAI Foundation

W e l c o m e t o y o u r f u t u r e

Total United States*Key Performance Indicator Outlook

(% Change vs. Prior Year)

2015 - 2016

Outlook

2015

Forecast

2016

Forecast

Supply 1.3% 1.4%

Demand 2.6% 2.2%

Occupancy 1.4% 0.8%

ADR 5.2% 5.0%

RevPAR 6.6% 5.8%

*STR

W e l c o m e t o y o u r f u t u r e

Total United States*Chain Scale Key Performance Indicator Outlook

2015F by Chain Scale

2015 Year End Outlook

Chain ScaleOccupancy

(% chg)

ADR

(% chg)

RevPAR

(% chg)

Luxury 0.5% 5.5% 6.1%

Upper Upscale 1.1% 5.0% 6.2%

Upscale 0.6% 5.4% 6.0%

Upper Midscale 1.9% 5.1% 7.1%

Midscale 1.8% 4.2% 6.1%

Economy 1.8% 5.2% 7.1%

Independent 1.0% 5.1% 6.1%

Total United States 1.4% 5.2% 6.6% *STR

W e l c o m e t o y o u r f u t u r e

Total United States*Chain Scale Key Performance Indicator Outlook

2016F by Chain Scale

2016 Year End Outlook

Chain ScaleOccupancy

(% chg)

ADR

(% chg)

RevPAR

(% chg)

Luxury 0.4% 5.2% 5.7%

Upper Upscale 0.5% 5.6% 6.1%

Upscale 0.6% 5.1% 5.7%

Upper

Midscale 0.6% 4.3% 4.9%

Midscale 0.9% 4.1% 5.1%

Economy 1.0% 4.2% 5.2%

Independent 0.7% 4.4% 5.1%

Total United

States0.8% 5.0% 5.8% *STR

W e l c o m e t o y o u r f u t u r e

2015 Year End RevPAR Forecast*Top 25 US Markets, May 2015 Forecast (Markets sorted alphabetically)

-5% to 0% 0% to 5% 5% to 10% 10% to 15%

New York Houston Anaheim Denver

Norfolk Atlanta Phoenix

Oahu Boston Tampa

Philadelphia Chicago

Dallas

Detroit

Los Angeles

Miami

Minneapolis

Nashville

New Orleans

Orlando

San Diego

San Francisco

Seattle

St. Louis

Washington

*STR

W e l c o m e t o y o u r f u t u r e

The New World

W e l c o m e t o y o u r f u t u r e

How has the world changed?

Traditional fences of:

• Geography

• Segmentation

• Language

• Channels

• Even knowledge…

…have become irrelevant.

Things have changed!

IHG – The World Changes

W e l c o m e t o y o u r f u t u r e

IHG - Implications and outcomes

• Homogenized products/price? Commoditization?

• Business models will begin to merge

• Intermediaries that do not adapt will struggle

• Sales, Revenue Management & Distribution must change

For the client, bespoke products and services will

increasingly become more important for an “In the Know”

experience that differentiates.

Partnerships must become deeper and communications

must increase.

W e l c o m e t o y o u r f u t u r e

1. Nurturing the Revenue Management Triangle – Revenue

Manager, Director of Sales and GM – the need to put time into

that critical team

2. Finding and keeping talent – it’s an employee’s market

with growth of new properties in many markets

3. Inaccessibility of customer – the sales process has become limited

with automation of leads

4. Need for speed – the hotel that is quickest and most

efficient with leads wins

5. Brand proliferation is confusing the consumer

Top 10 Challenges Facing

Hotels

W e l c o m e t o y o u r f u t u r e

Top 10 Challenges

Facing Hotels

6. Need to keep people focused on revenue and keep them

selling - with all of the other noise going on

7. Rising distribution costs and how to manage different

systems used by different brands

8. Group business is growing, but booking window is

shorter

9 Customer Ownership - Who owns customer data

today? - The hotel or the brand?

10. Hotels have to own the customer experience

W e l c o m e t o y o u r f u t u r e

Top 10 Issues in Hotel RM

� Published rates

� Guest mix

� Overbooking

� Low occupancy

� Selling out in advance

� The brand image

� Evolving technology

� Middle men

� Ancillary revenue

� Profit

W e l c o m e t o y o u r f u t u r e

Need for ConvergenceChanging Roles of Sales & Revenue

� Working as a team to achieve goals

� Both disciplines needs to be aligned and have strong communication

� Focus on same end goal

� Define optimal mix

� Use data driven information to determine appropriate sales driven efforts

� Evaluate

13

GM

DOS DORM

W e l c o m e t o y o u r f u t u r e14

Segmentation Mix: Scenario 1

PCT ADR Gross

Revenue

Booking

Fee

Net

ADR

Cost Net

Revenue

VAR

Group 10 $140 $42,000 $140 $0 $42,000

FIT 10 $100 $30,000 $100 $0 $30,000

Corp

Neg

20 $185 $111,000 $9.00 $176 $180 $110,820

OTA 40 $210 $252,000 $52.50 $158 $2,100 $189,000

Leisure 20 $210 $126,000 $3.00 $207 $60 $125,940

TOTAL100 $187 $561,000 $166 $497,760

W e l c o m e t o y o u r f u t u r e15

PCT ADR Gross

Revenue

Booking

Fee

Net

ADR

Cost Net

Revenue

VAR

Group 15 $140 $63,000 $140 $0 $63,000

FIT 10 $100 $30,000 $100 $0 $30,000

Corp

Neg

30 $185 $166,500 $9.00 $176 $180 $166,230

OTA 20 $210 $126,000 $52.50 $158 $2,100 $94,500

Leisure 25 $210 $157,500 $3.00 $207 $60 $157,425

TOTAL 100 $181 $543,000 $170 $511,155 +$13,395

<$6.00

>

<$18,000> +$4.00 +$13,395

Variance from Scenario 1

Segmentation Mix: Scenario 2

W e l c o m e t o y o u r f u t u r e

Key Takeaways

o Make sure revenue management & sales are aligned

in “voice” and goals

o Ensure organizational set up is optimal & goals are

clearly defined

o Identify true costs of acquisition

o Don’t try to do more than what is realistic! Build the

Foundation of the Future

o Put your team through HSMAI and FIU’s RO2Win!

W e l c o m e t o y o u r f u t u r e

The Program

W e l c o m e t o y o u r f u t u r e

Concepts• Room Night to RevPAR

• Guests, Rates/Prices,

Channels, Hotel

Segments

• Costs of Doing Business

• Forecast, Pace, Supply

& Demand, Price

Elasticity, Channel

Management, Profits

• Price Positioning – BAR,

LOS, CTA, Dynamic &

Static Pricing, Fences

• Displacement Analysis

• Upselling

• Reputation Management