Dynamic & innovative hotels are taking their revenue strategy to new levels with insightful market data
Blog Soundbites:
- Hoteliers need granular, real-time market intelligence to remain competitive
- The OTA Insight & IDeaS partnership gives hotels access to data that supports better pricing
- Clients leveraging this integration have seen increases in RevPAR by 15%
IDeaS and OTA Insight partnered together to give hoteliers an edge over their competitors by providing them with industry-leading revenue management solutions. CEO and co-founder of OTA Insight, Adriaan Coppens, was recently recognised by HSMAI as being one of Europe’s Top 20 Extraordinary Contributors to the Industry for his leadership and as a leading innovator at the IDeaS Global Partner Ecosystem Awards. Vivek Bhogaraju, director of global strategic alliances and initiatives at IDeaS, had the opportunity to sit down with Coppens to discuss how mutual clients are benefiting from the IDeaS and OTA Insight partnership.
VB: First of all, congratulations on the recent awards! Can you share your perspective on how hoteliers are benefiting from the IDeaS and OTA Insight partnership?
AC: Thank you! We’re thrilled to be in a partnership with IDeaS to help hoteliers make smarter pricing decisions and stay ahead of competitors. We provide a range of tailor-made intelligence tools that help hotels plan their revenue strategy and drive profitability. We’re really impressed with the innovative ways in which IDeaS makes use of the data we provide in IDeaS G3 Revenue Management System; in particular, the way the granular data is used to provide decisions at the room type level.
VB: With the hotel landscape becoming more dynamic and competitive every day, how do you see market data helping hoteliers?
AC: In order for hoteliers to remain competitive in the current environment, there is a need to have granular competitive intelligence that is reviewed and revised regularly to provide real, in-depth insight into market nuances and competitive changes. Having this data in real-time and on-demand is crucial for hoteliers to ensure they can stay up to date in a dynamic market.
But this data doesn’t mean anything for a hotelier unless it is presented in a simple, consumable format that is easily actioned. When creating OTA Insight, our aim was to make a platform that encompasses all these key factors in one simple dashboard solution that was easy to use for everyone – from revenue management teams in a head office right through to the front office staff at hotels.
VB: In the current market, it’s essential for a hotel to have a competitive edge whether they are part of a global chain or an independent. How do hotels utilizing OTA Insight and IDeaS solutions gain a competitive edge?
AC: The partnership gives IDeaS access to competitive rate intelligence that enables their clients to make better pricing decisions. What’s different about OTA Insight is that we provide detailed data analytics, which helps hoteliers make more accurate pricing decisions when integrated with IDeaS.
The live-shopped data within OTA Insight is broken down in detail – by room type level and length of stay (LOS) – which gives greater intelligence in how competitors structure their rates. This powerful data helps drive demand forecasts and pricing decisions, which gives hoteliers a real edge over their competition since it empowers them to make pricing decisions based on the full spectrum of rates.
VB: Channel performance and managing the balance between direct bookings and working with indirect channels has been a very important topic for hoteliers recently. How can market intelligence help manage channel mix?
AC: It’s important to know your target audience and price according to LOS, source market, weekend/weekday and events in the market. Hoteliers should know which audience they want to attract to their brand.com website, and when strong OTA visibility is crucial for achieving their budgets and goals. They should also know who they need to attract via OTA/meta channels. To help with this, hoteliers need access to reliable and accurate information for their local market to plan ahead, as well as new types of intelligence metrics (such as OTA or metasearch rankings) to better understand their online visibility and monitor how occupied the market is in certain periods.
At the core of OTA Insight’s business is providing hoteliers with simple-to-understand, real-time market data that is actionable. To do this, we provide the tools hoteliers need to make the right pricing and distribution decisions for their property.
Simple parity reports, for example, help our clients see whether their distribution strategy is working, or when distribution partners are not targeting the required target markets for their hotel. This enables them to maximise their revenue and profitability by using this information to make the right choices across their channel mix to efficiently plan and execute pricing strategies.
We’ve had examples of customers who have integrated with IDeaS and OTA Insight where they were able to increase RevPAR by over 15 percent in a 12-month period by managing demand and pricing more effectively across room type variations and the right channels.
VB: That’s compelling, Adriaan! Looking at today’s landscape, hotels have never had so many choices when it comes to the market data they use to make decisions. What are your thoughts on historical vs. forward-looking data?
AC: Both are indispensable and work alongside each other. To better understand the impact of certain high/low demand periods in the market and competitive set pricing, it’s important to look back at the historical pricing patterns. Of course you never truly know which demand period is coming up next week, month or quarter, so forward-looking intelligence on pricing, events and macro-economic insights are key to be able to price for the future. This is why it’s great to have the partnership with IDeaS, as you can figure out future demand patterns based on both historical and future demand indicators to get this right.
VB: In addition to integrating market data with a revenue management system, what other opportunities should hoteliers be considering to power the best revenue strategy possible?
AC: I touched on it before and will repeat it again: Rate integrity is one of the biggest challenges (and opportunities) in the hospitality market and it heavily impacts the profitability of hotels. It’s essential for hoteliers to have a firm grip on their contracts and to know where — and at what rate — their inventory is being distributed. This is key for them to drive higher ADR and profitability for a sustainable business. At the moment, a lot of business is leaking to lower rate and higher cost channels without hotels realising it. Luckily, hoteliers are becoming more and more aware of this and, with the use of some of our tools, it is easier to spot where leakage is occurring so they can monitor and address these issues.
VB: If there is one action you would suggest hotels took towards building better data for strategic decision making, such as channel optimization, what would you suggest?
AC: It would definitely start with having a better understanding of what is driving their business, and being clear on the impact each channel has on their profitability to determine how reliable or ‘future-proof’ the business is for them (e.g. corporate contracts vs leisure/group business). Data is so widespread across many reports and departments that it is impossible to instantly know what is driving your over- or under-performance in the market when receiving your weekly STR report. Even more important is knowing how you are tracking for the coming week or month. Understanding the factors driving your business ahead of your competitors will help hoteliers adjust their position to make up for future loss or push even harder to smash their budgets.
VB: As someone recently recognised as one of the top thinkers in the industry, what do you see next for hotels in the market intelligence and revenue management space?
AC: As the market is becoming ever more dynamic, the focus will be on becoming very agile and dynamic to not only recognize, but use the latest data technologies to drive your business. A lot of business is moving online and towards the mobile channels – a recent study by Criteo in 2016 found that OTAs generated 40 percent of hotel bookings through mobile devices. ‘Bleisure’ is not just a trend, but is here to stay, as people are travelling more and more around the globe for business and pleasure, with and without family, friends and colleagues. This means the traditional segments will blur even further (e.g. Booking.com for business, Expedia offers HomeAway stays and Airbnb has 11 percent of its bookings by business guests). Hoteliers will need to know how to address these online, mobile and newly-emerging channels.
In an effort to stay ahead of the curve, we are doing some interesting research and applying machine-learning techniques, which will steer our customers and partners in the right direction. At the same time, we are also looking into more partnered integrations to provide hoteliers with the best solutions for an edge over their competitors, so watch this space!
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