The Impact of Social Media on Revenue Managementeoplugin.commpartners.com/HSMAI/110630/110630_Slides.pdfMarket Share Forecasting Definition A process that utilizes historical and demand

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Thursday, June 30, 2011Thursday, June 30, 2011

2:00 2:00 –– 3:00 PM EDT3:00 PM EDT

Hospitality Sales and Marketing Association International (HSMAI)

The Impact of Social Media The Impact of Social Media

on Revenue Managementon Revenue Management

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Overview of Format and TopicOverview of Format and Topic

Webinar ModeratorFran Brasseux

Executive Vice President, HSMAI

POLL QUESTION #1POLL QUESTION #1How many people are participating in

this webinar at your location today?

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� 8 or more

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Bonnie E. Buckhiester, ISHCPresidentBuckhiester Management Limited

TodayToday’’s Presenters Presenter

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Impact of Social Media on RM

Session Overviewn The new realityn Social media & RM –

convergence or collision?n Learning from the past

Fact Check

n FB tops Google for weekly trafficn 96% of millennials on a social

networkn 48% of consumers combine

social media & search engines in their buying process

n 89% of companies note SM will become useful cog in marketing mix moving forward

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Sources: socialnomics – Erik Qualman &Social Media Today – June 2011

Years to Reach 50 Million Users

n Radio – 38 yearsn TV – 13 yearsn Internet – 4 yearsn iPod – 3 yearsn Facebook – 200M

users - less than a yearn iPod app downloads

1B in 9 months

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If Facebook Were a Country

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#1

#2

#3

% Online

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68%

62% 62%

60% 59%

Source: Social Times - December 2010- ComScore

77.7%

Are You a Twitter Follower?

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10.5 M 10.0 M

Social Media Universe

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96% of Americans – 50% of Canadians on FacebookSources: SocialTimes – December 2010 &Social Media Today – June 2011

There’s No Going Back

Acceleration Amplification

Bottom Line…

…like trying to shoe a horse on a dead run…

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convergence or collisionn Learning from the past

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Product AlignmentREVRoadMap®

…your “GPS”

Product Alignment

Competitive Benchmarking

StrategicPricing

DemandForecasting

DistributionManagement

BusinessMix

Manipulation

Know Your Value Score

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Customer Perception

n Do you know your value rating on Tripadvisor?n How does that compare to your competitors?

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Scale of1 to 5

1 2 3 4 5

Value 0 1 6 17 23

% 0% 2% 12% 34% 46%

Subject Hotel – 50 reviews

Value Score = 3.86

Details, Details

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Compare & Choose

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Consumer Tips

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Impact on RM

n Value scores provide pricing signals

n Room product “hyper-detail” means close watch on RevPAR by room type

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� Social Media changing approach to benchmarking metrics

REVRoadMap®…your “GPS”

Product Alignment


StrategicPricing

DemandForecasting


BusinessMix

Manipulation

Going Beyond Tripadvisor

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Social Media Management

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Emerging Benchmarks

25Source: Lodging Interactive

Evolving Focus

Traditional Metrics New MetricsAnnual Budget TripAdvisor/ OTA reviews –

market rank, rating, ttl reviews

Last Year # Videos

Market share (STAR) # Facebook fans

GDS share (Hotelligence) # Twitter tweets

OTA share # Photos shared

Divisional profit # Bookmarks & blog entries

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What if you compared Social Media metricsagainst market share improvement?

Impact on RM

n Tracking & evaluating new metrics

n Cross comparison of market share performance to SM metrics

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Strategic Pricing

n New retail conceptsn New search featuresn Focus on value vs.

price


Product Alignment


Strategic Pricing

DemandForecasting


BusinessMix

Manipulation

New Retail Concepts

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n Members-onlyn Flash salesn Group buyingn Auctions

Déjà vu?

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Google Places & Google Maps

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Focus on Value vs. Price

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How Good is the Deal?

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Viral Proliferation of Deals

Yapta.com launches "Frugal Travel Flaunts" for Facebook

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Case Study: My YAPTA Email Alert

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Impact on RM

n Hyper price transparency

n Value seekersn Acceleration –

spread the wordn Staff scheduling –

sufficient to respond to inquiries as result of a SM related initiative

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Demand Forecasting

n Forecasting acumenn Booking windowsn SM & forecasting


Product Alignment


Strategic Pricing

DemandForecasting


BusinessMix

Manipulation

Forecasting Challenges

n Shrinking lead timesn Market segments blurredn Complex online distributionn Impact factors hard to identify

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Compressed Booking Window

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Online Forecast Tools

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Airfare Forecasts

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Forecast Confidence

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Room Rate Forecasts

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Forecasting Hotel Rates

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Accuracy is Key

45By day…

Accuracy is Key

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By segment…

What Can We Learn from the Stock Market?

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Impact on RM

n Forecasting skills & regimen must improve

n Timing of pricing decisions even more critical

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Business Mix Manipulation

n Business mix vs. price n Market-share forecasting


Product Alignment


Strategic Pricing

DemandForecasting


BusinessMix

Manipulation

Using Business Mix vs.Price as Primary Strategy

50As rate “conflicts” intensify

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Looking Forward vs. Looking Back

Navigating with advanced science!

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Proactive vs. Reactive

n Proactively “attack” market demand to your advantage

n Raise RevPAR without lowering pricen Diversify riskn Manage yield from bottom up (profit vs. revenue,

Total RM vs. Rooms revenue dominance)n Return to equal levels of profitability more easily

Strategic vs. tactical

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Market Share Forecasting

DefinitionA process that utilizes historical and demand data

to forecast future RevPAR performance then project that performance into the market place relative to your competitive set. A market share forecast predicts future market penetration indexes.

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Looking Straight Ahead

Primary Comp Set

Your Forecast

April 2011

Comp Set Performance

April 2010

Market Penetration

Forecast

Occupancy 70.2% 67.7% 103.7

ADR $125.40 $135.80 90.8

RevPAR $88.03 $91.94 95.7

Scenario…if the market performed no better than last April

Example

Impact on RM

n Forward looking analysis must be more sophisticated

n Highly collaborative forecasting

n More emphasis on short & mid-term business mix strategies

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Distribution Management

� New algorithms� Obsessive researchn Mobile options


Product Alignment


Strategic Pricing

DemandForecasting

Distribution Management

BusinessMix

Manipulation

Focus on Social Media

n Changing algorithms based on social media

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Obsessive Research

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Source: New York Times – February 21, 2010

Mobile Impact

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Unprecedented options…

Tic…Tic…Tic

n 500M FB accountsn 50% log in each dayn 65% log-in via mobilen 80% Twitter users are

mobilen UK – 50% of all mobile

traffic going to FBn 50% SPG on FB & Twitter

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Years, months, weeks, days, hours, minutes…

Impact on RM

n Larger % bookings influenced by SM

n Extensive research means even better informed consumer

n Lead times shrinking to minutes

n Must be expert fencer

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convergence or collision?n Learning from the past

Key Challenges –Past

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Key Challenges –Present

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The Right Resource

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ReservationsManager

Revenue Manager

Director,Demand

Management

Whose Job is It?

70% - Engagement 30% - ROI

66Social Media Today – June 2011

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Impact of SM on RM


Product Alignment


StrategicPricing

DemandForecasting


BusinessMix

Manipulation

� Use value score for pricing signals

� Track RevPAR by room type� Track/evaluate new metrics� Compare market share to

SM metrics� Manage hyper price

transparency� Leverage value seekers� Watch for acceleration� Schedule staff judiciously

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Impact of SM on RM


Product Alignment


StrategicPricing

DemandForecasting


BusinessMix

Manipulation

� Forecasting skills/regimen � Timing of pricing decisions� Forward looking analysis� Highly collaborative

forecasting process� Increased emphasis on short &

mid-term mix strategies� Larger % bookings influenced

by SM� Obsessive research = even

better informed consumer� Lead times shrinking to

minutes� Must be genius at fencing

prices

Take-Aways

n Social media here to stayn Question resource choices & allocation of timen Deploy an RMS nown Purchase market intelligencen Evaluate level of strategic leadership of RM effortn Get yourself some youth mentors

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Find Your Youth Mentors

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Teenager Twenty-something Thirty-something

Bonnie E. Buckhiester, ISHCPresidentBuckhiester Management Limited

Questions?Questions?

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Upcoming Webinars:The HSMAI University 10-part 2011 Revenue Management Series –Next:Session 4 on July 26 - How Will You Measure Your Success?Special rates for registering for entire series

Best Practices in Creating A Sales Plan – July 21, 2011 – With John ParkeBest Practices in Creating A Marketing Plan – August 2, 2011 – With John Parke

To register, please go to www.hsmaiuniversity.org.

And don’t miss …HSMAI's MEET NationalDate: September 07, 2011 - September 08, 2011, Washington DC

The Hospitality Sales & Marketing Association International (HSMAI), announces a new way to MEET. Building on more than 20 years of success with connecting planners and suppliers and adding to its efforts this year to rebrand the organization's mission and focus, HSMAI's renowned Affordable Meetings® conference and exhibition is taking on a new name and a new vision.Starting with its National show, Sept. 7-8 in Washington, D.C., meeting and event professionals will be invited to join their hospitality industry colleagues at HSMAI's MEET: Meetings, Events, Education, Technology.Reserve your booth space now for 2011 to secure prime positioning.Visit www.hsmaimeet.com for more information.

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HSMAI and RedGlobal announce new 4 week online course leading to Certified in Hospitality Business Acumen (CHBA) Certification!

� Relevant – Respected – Recognized – this eLearning, Si mulation, and Web Conferencing course is given nowhere else

� Begun in 2006, we are thrilled to announce the new online version of a course that over 4,000 participants in 40 countries have taken onsite and given a 9.5 (out of 10!) rating

� Increase your CONTRIBUTION – Stay COMPETITIVE – Demon strate your EXPERIENCE – Advance your CAREER

� Registration Available Now at http://www.hsmai.org/resources/chba.cfmor email [email protected] with questions

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TodayToday ’’s webinar is copyright 2011 by the Hospitality Sale s & Marketings webinar is copyright 2011 by the Hospitality Sale s & Marketing Association International Association International with All Rights Reserved.with All Rights Reserved.

Documents

The Impact of Social Media on Revenue Managementeoplugin.commpartners.com/HSMAI/110630/110630_Slides.pdfMarket Share Forecasting Definition A process that utilizes historical and demand