Klaus Kohlmayr, IDeaS’ chief evangelist, speaks with Cindy Estis Green, CEO and co-founder of Kalibri Labs, about competitive hotel data and distribution strategies for the new year.
“Discovery is seeing what everybody else has seen and thinking what nobody else has thought.” – Dr. Albert Szent-Gyorgyi
This is Kalibri Labs’ CEO and co-founder Cindy Estis Green’s favorite quote. Cindy has spent most of her professional lifetime uncovering and surfacing data, demystifying the cost of distribution and challenging the hotel industry to think differently.
Voted one of the 25 Extraordinary Minds in Sales & Marketing by HSMAI, a member of the Hospitality Technology Hall of Fame and one of Cornell University’s 90 most Influential Hoteliers, Cindy clearly knows a thing or two about this industry—both where it’s been and where it’s going.
Cindy’s company, Kalibri Labs, specializes in making true discovery possible with meaningful analytics and smart insights on behalf of hotels and hospitality technology companies. I am excited to share her insights into the state of the industry and how hotels can make sense of their data in a rapidly shifting economic landscape.
Klaus Kohlmayr (KK): Hotels are hungry for more data to better predict revenue performance in the year ahead. What has been your approach in terms of industry data analysis with Kalibri Labs over the past few months?
Cindy Estis Green (CEG): There’s no longer a status quo, and predictive modeling and forecast data is essential to inform the market what the next year might actually look like. It’s not just about more data but looking at the right data. The need to understand at a rate-category level the nature and profile of demand in a market has become more critical than ever.
Kalibri’s database has the most granular data available in the industry because we get down to the transaction level, aggregating and benchmarking rate category, channel, cost of acquisition, arrival and departure dates, lead time, length of stay, loyalty contribution—even at the individual travel agency or corporate account level.
KK: Profit management and understanding the cost of distribution is more important now than ever. What advice do you have for hotels in terms of their channel strategy?
CEG: Many consumers are channel agnostic. The same consumer who might book through a third party might also book a loyalty rate through a brand, and the difference is dramatic—up to twice as profitable to get the business through direct channels.
I recommend hotels be proactive about going after more direct business. Your brand doesn’t have to be on every shelf. You can put your time and funding into promoting direct channels to your advantage, and ultimately to the guest’s advantage, too, if they can receive unique benefits, for instance, through a loyalty program.
Across the U.S., loyalty member offers are outperforming OTA business, cost of acquisition has gone down, and we’ve seen a more than 20 percent year-over-year growth in direct-channel business versus indirect. Some of that can likely be attributed to a consumer bias toward booking direct due to the pandemic and concerns over health and safety protocols. Also, hotels with contactless check-in apps have been able to drive more direct business over the past year.
KK: How has Kalibri’s predictive forecast modeling been able to help hotels in the current environment?
CEG: A lot of hotels are not submitting formal budgets for 2021 but are just forecasting monthly. We help individual hotels look historically as well as into the future—by month, by day, by rate category—to get an overall picture of demand in their specific submarket. Hotels can then look at their business mix to make better judgments about what to expect.
With the pandemic, everyone had to throw out what they thought they knew and learn anew what is out there and watch it every week to see how things might be changing in terms competitive set and demand patterns. Even though there’s a lot of hope for the vaccine, we probably still have another four to six months ahead of us before it’s in widespread distribution and we start to see much of the normal corporate and group travel patterns start to reemerge.
The content above is a paraphrased excerpt from the latest episode of the Unconstrained Conversations podcast. Be sure to subscribe on your favorite podcast network and share episodes with your colleagues in the travel and hospitality space who may find them useful.
Check out my full discussion with Cindy here, and tune in to the podcast next week, December 17, for a holiday special “Ask Me Anything” episode with yours truly.
IDeaS and Kalibri Labs share a joint interest in keeping the hospitality industry well-informed, leveraging holistic data insights to provide actionable advice. We look forward to continuing our relationship in the new year as we explore the future of hotel commercial strategy.