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Upscale to luxury hotel room image from Canva
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Hotel Total + Guest Revenue Management

Hotel Total + Guest Revenue Management: A Comprehensive Approach

by Doug Radkey

Upscale to luxury hotel room image from Canva

In the evolving landscape of hotel revenue management, the focus on traditional metrics like RevPAR (Revenue Per Available Room) and ADR (Average Daily Rate) is shifting.

While these metrics have been the gold standard for assessing a hotel’s performance, they no longer provide a complete picture.

Why, you ask? Because guest expectations and spending patterns have evolved. Hotels are not just places to stay; they are multi-faceted destinations offering a variety of services, such as dining, spa treatments, recreational activities, events, and more.

RevPAR and ADR measure performance based solely on room occupancy and rates, which overlooks the revenue generated from these additional services. They do not account for on-premise spending by guests on activities, food and beverage, wellness services, or other ancillary revenue streams that can impact a hotel’s overall profitability significantly.

Further, these traditional metrics fail to capture the qualitative aspects of the guest experience, such as personalized services, guest satisfaction, and long-term loyalty, all of which play a crucial role in a hotel’s success.

In essence, relying exclusively on RevPAR and ADR can lead to a narrow, and potentially misleading, view of a hotel’s financial health, missing out on opportunities to build a true legacy within this industry.

Where do we go from here, then? Enter Total Revenue Management (TRM) and Revenue Per Available Guest (RevPAG). These “new” metrics offer a more holistic view of a hotel’s financial health, moving beyond just room revenue to encompass the total guest experience, and the entire property’s revenue potential.

Understanding Total Revenue Management (TRM)

Total Revenue Management is a modernized approach that measures and maximizes revenue across all revenue streams within a hotel.

This includes rooms, food and beverage, spa services, recreational activities, and any other revenue-generating departments. TRM is about synchronizing and optimizing these various revenue streams to elevate the hotel’s total profit margin.

Let’s put this into perspective. Picture yourself as a hotel operator in Las Vegas. Maybe there is an instance where you have a group of high-rolling guests staying at your casino hotel/resort. Instead of charging them for their rooms, you decide to comp their stay entirely.

To some, giving away a free room in a city where occupancy rates are crucial might seem like a risky move. But you know that the cost of the room will be a drop in the bucket compared to the potential revenue they could generate on the casino floor, and on-site bar and restaurant. These guests end up spending hours at the tables and slot machines, contributing far more to the bottom line than a single night’s room rate ever could.

But it’s not just about the high rollers. What about off-peak times, where you have to get creative to keep the revenue flowing?

Perhaps you offer discounted spa treatments to your guests on weekdays when the hotel isn’t as busy. To your surprise, these guests who wouldn’t typically splurge on spa services took advantage of the discounted rates. This not only increases your spa revenue during slow periods but also enhances the overall guest experience, turning casual visitors into loyal guests.

These experiences are just two quick samples showcasing how maximizing revenue isn’t about charging for every service; it’s about understanding the broader picture, and making strategic decisions that drive total revenue for your property, every single day.

The framework of TRM is all about understanding the affiliation of each revenue stream available within your property. By taking a comprehensive view of the property’s revenue potential, you can create packages and services that encourage spending across all departments, not just the rooms.

The 5 Advantages of Total Revenue Management

It’s safe to say that implementing TRM can lead to a more robust and modern operation that benefits your hotel in several key areas:

  • Revenue Growth: TRM goes beyond just room revenue. By focusing on every revenue stream—be it dining, spa services, or recreational activities—TRM maximizes your hotel’s overall revenue potential. This comprehensive approach ensures that every aspect of the guest experience contributes to the bottom line, leading to a more diversified and stable revenue base.
  • Enhanced Asset Utilization: TRM encourages the optimal use of all hotel facilities, from restaurants to event spaces and wellness centers. By identifying underutilized assets and creating strategies to boost their usage, such as offering special packages or promotions, your hotel can increase its profitability significantly. This not only drives revenue but also elevates the guest experience by offering more value-added services.
  • Streamlined Operational Costs: A key benefit of TRM is the ability to streamline operations across various departments. Leveraging data and cross-departmental insights improves your hotel’s resource allocation, waste reduction, and implementation of more cost-effective practices. This leads to lower operational costs and increased profit margins, allowing your hotel to reinvest in areas that perhaps enhance the guest experience.
  • Unified Team Effort: TRM fosters a cohesive workforce by aligning all departments with a common goal of maximizing total revenue. When the front desk, housekeeping, food and beverage, and other teams are all working towards the same objectives, it leads to several improvements. These include enhanced productivity, improved guest satisfaction, and a seamless experience for guests. This unified approach creates a culture where everyone understands how their role impacts your hotel’s success.
  • Boosted Efficiency and Productivity: Implementing TRM encourages different departments to collaborate more effectively, streamlining processes and reducing redundancies. By focusing on total revenue rather than isolated departmental metrics, your hotel can create a more dynamic and responsive operation. This increased efficiency not only enhances the guest experience, it also drives higher employee satisfaction by creating a more organized and purpose-driven work environment.

Implementing Total Revenue Management

The first step to implementing TRM is to invest in integrated Property Management Systems (PMS) such as Mews, and Revenue Management Systems (RMS) such as Atomize. These systems are essential for tracking, reporting, and forecasting revenue across the entire property.

Further, such platforms provide real-time data that helps inform strategic decisions.

One of the biggest challenges in implementing TRM, however, is bridging the gap between technology, staff, and different departments.

Hotels must ensure that data flows across all departments seamlessly, allowing for cohesive decision making. This requires both employees and the property’s infrastructure to adapt to new behaviors and processes. Staff training and a culture that embraces data-driven decision making are crucial for the successful implementation of TRM.

The Transition from RevPAR to Revenue Per Available Guest (RevPAG)

While TRM offers a broad view of the hotel’s revenue potential, RevPAG provides a more guest-centric metric for assessing performance.

  • RevPAR (Revenue Per Available Room): You’re likely familiar with this one. This is the traditional metric that provides a quick snapshot of a hotel’s performance by considering both occupancy (OCC) and the average daily rate (ADR). While useful, it focuses solely on room revenue, ignoring other revenue streams, and the overall guest experience.
  • RevPAG (Revenue Per Available Guest): Unlike RevPAR, RevPAG looks at total revenue generated by each guest during their stay, regardless of how many rooms are sold, or how many guests occupy a room. It captures all spending, including dining, spa services, recreational activities, and more. This metric offers a more advanced understanding of guest behavior, and their total contribution to the hotel’s revenue.

The 4 Advantages of Revenue Per Available Guest

Focusing on RevPAG can drive on-premise spending, and enhance the guest experience. Some advantages for your hotel may include the benefits below.

  • Engaging Loyalty Programs: Loyalty programs are a powerful tool for encouraging repeat visits and on-property spending. Offering rewards, exclusive perks, and personalized incentives helps your operation foster long-term relationships with guests. Such programs prompt guests to return, and continue spending within the hotel. A well-designed loyalty program not only increases revenue per guest but also strengthens brand loyalty, turning one-time visitors into lifelong advocates.
  • Personalized On-Site Experiences: Understanding guest preferences will further allow your hotel to craft tailored packages and experiences that encourage guests to spend more on-property. Whether it’s guided tours, hands-on cooking or mixology classes, or themed live entertainment, these curated activities enhance the guest experience, and drive additional revenue. Personalized offerings create memorable moments that guests are willing to pay a premium for, increasing overall spend per guest.
  • Wellness and Lifestyle Services: Investing in wellness services such as spas, fitness centers, and recreational facilities opens up new revenue streams, and enhances the overall guest experience. By offering wellness packages, relaxation treatments, or fitness classes, your hotel can cater to the growing demand for health and wellness experiences. These services encourage guests to spend more on-premise, turning your hotel into a desired destination that meets various guest needs.
  • Elevated Dining and Beverage Offerings: Exceptional culinary and mixology experiences can enhance on-premise spending significantly. By offering unique dining options like chef’s table events, wine tastings, or mixology masterclasses, your hotel can attract food and beverage enthusiasts, and encourage them to spend more during their stay. These high-quality experiences boost revenue, and elevate your hotel’s reputation as a destination for food and drink.

Implementing Revenue Per Available Guest

To maximize RevPAG, your hotel needs to focus on creating personalized guest experiences, and integrating technology seamlessly across all touchpoints. This involves taking the steps below.

  • Personalized Guest Experiences: Tailoring services and offerings to your targeted, individual guest preferences to not only enhance their stay but also encourage additional spending. This can include personalized room amenities, bespoke on-premise experiences, and exclusive access to hotel facilities.
  • Seamless Technology Integration (Tech-Stack): Integrating Revenue Management Systems (RMS) with other hotel technologies, such as PMS and POS systems, allows your hotel to track guest behavior, spending patterns, and preferences in real-time. This data is invaluable for identifying up-selling opportunities, and creating targeted marketing strategies.
  • Total Revenue Management Mindset: Adopting a TRM mindset involves viewing each guest as an opportunity to generate multiple streams of revenue. Your hotel operations team should train staff to recognize and act on up-sell opportunities, while maintaining a high standard of service.

Benefits of Using Both RevPAG and Total Revenue Management

When used together, RevPAG and TRM provide a powerful framework for maximizing your hotel’s revenue and profitability.

  • Revenue Optimization: TRM ensures that every revenue stream is optimized, while RevPAG provides insight into the guest’s overall value. Together, they allow your hotel to create targeted strategies that maximize revenue from both rooms and ancillary services.
  • Enhanced Guest Experiences: By focusing on RevPAG, your hotel can deliver personalized experiences that encourage guests to spend more on-property, leading to higher satisfaction, and repeat business.
  • Informed Decision Making: With a TRM approach, your hotel can gain access to comprehensive data across all departments. This data-driven approach enables more informed decisions about pricing, packaging, and service offerings.
  • Competitive Edge: Hotels that adopt TRM and RevPAG are better positioned to differentiate themselves from competitors, offering a more value-driven guest experience while maximizing profitability.
  • Sustainable Growth: Implementing TRM and RevPAG strategies leads to sustainable growth by optimizing revenue streams, and reducing reliance on room occupancy alone.

This diversified revenue approach enhances your hotel’s resilience in fluctuating market conditions.

My Final Thoughts

There’s no question, the hotel industry is evolving, and so must its approach to revenue management.

Total Revenue Management and Revenue Per Available Guest offer more comprehensive metrics that go beyond the limitations of traditional measurements like RevPAR and ADR. By adopting a modernized approach that integrates these metrics, your hotel can optimize revenue, enhance guest experiences, and build a more robust, modern operation.

To realize the benefits of TRM and RevPAG fully, your hotel needs to invest in technology, embrace a guest-centric mindset, and foster a culture of data-driven decision-making. In doing so, you’ll unlock new opportunities for your brand that drive profitability, and secure a more competitive edge.

Image: Canva

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AI-generated image of a closeup of a loan application and pen
by David Klemt David Klemt No Comments

The Banks Have it Wrong

The Banks Have it Wrong

by Doug Radkey

AI-generated image of a closeup of a loan application and pen

It’s widely assumed that a well-written business plan will impress banks and SBA-type programs, and secure the funding required to launch a hospitality concept.

When starting a bar, restaurant, or hotel, most people are told exactly that: “You just need a business plan.”

The problem, however, lies in how these business plans are created. Too often, aspiring entrepreneurs turn to fill-in-the-blank templates provided by banks or online resources. They believe that simply completing the form will open the doors to financing, and start them on the path to building a successful business.

Unfortunately, this approach can do more harm than good. Let’s explore why the traditional reliance on business plan templates, including AI-generated business plans, can set both businesses and lenders up for failure.

In this article I dive into real-world examples, examine the success and failure rates of loans in the hospitality industry, and outline why banks and other programs need to rethink their loan approval processes to reduce risks for not only themselves but the entrepreneurs they serve.

The Problem with Business Plan Templates

Imagine this scenario: You’re excited to open a hospitality business, but you don’t know where to begin. You do some research, and learn quickly that you need a business plan to secure a loan. The bank or Small Business Administration (SBA) offers you a convenient template to complete, or you find one online that seems like it will do the job. You fill in the blanks, submit the plan, and, to your delight, the bank approves all or a portion of your loan.

However, the approval doesn’t mean your business plan is actually sound. Read that again.

It only means it meets the basic requirements of the bank’s loan approval checklist. A template provides a false sense of security, making entrepreneurs think they’ve covered all their bases when, in reality, crucial aspects of the business are left unaddressed.

For example, I recently reviewed a business plan for a client who had used a bank-provided template prior to our engagement. The plan was approved by the bank, but upon closer inspection, I found numerous errors: the start-up financial projections were unrealistic, the cash-flow analysis was incomplete, and crucial aspects of market analysis were missing.

The result? The project is on track to run out of money before it even opens its doors.

This example highlights a troubling issue: Templates don’t provide clarity, and they certainly don’t prompt critical thinking about the true costs to start, and the real challenges that the business will face once it’s operating.

The Risks of Using Templates

Business plan templates may seem like an easy solution, but they come with significant risks.

  1. False Sense of Security: A completed template may look professional, but it doesn’t guarantee that the plan is sound or comprehensive. Key elements can be glossed over, copy and pasted, or simply misunderstood.
  2. Lack of Critical Thinking: A template doesn’t ask tough or industry-specific questions. It doesn’t force you to analyze the competitive landscape, identify potential risks, or develop a clear financial strategy around a unique concept.
  3. Inadequate Financial Analysis: Templates often provide a basic structure for financial projections but fail to help you understand the true costs of starting and running a business. A template won’t be specific to your concept, your revenue and cost channels, or industry benchmarks. The template won’t catch errors in your financials, leaving you and the bank exposed to significant risk.
  4. Inability to Stand Out: In a crowded market such as the US, Canada, or Europe, differentiation is key. A cookie-cutter business plan won’t help you stand out from the competition. Despite handing them out, banks see thousands of these plans, and if you don’t demonstrate why your concept is unique and viable, you’re setting yourself up for denial.

The Dangers of AI-Generated Business Plans

As technology advances, AI-powered business plan generators are becoming more popular. I’ve seen a few ads for them over the past few months.

These tools claim to be able to create a business plan in minutes, promising efficiency and ease. However, relying on AI to write your business plan is just as dangerous as using a template. The same issues apply: lack of clarity, shallow financial analysis, and the absence of critical thinking.

AI-generated business plans may provide a surface-level solution, but they cannot replace the deep analysis required to make a business successful. Business plans need to be customized and thought out thoroughly, with insights drawn from real-world strategic planning.

Hospitality Industry Loans: Success and Failure Rates

The hospitality industry—particularly the accommodation and food service sectors—has one of the highest loan approval rates, but it also has some of the highest operator failure rates.

According to the U.S. Small Business Administration, in 2022 alone, 6,297 loans were approved for the accommodation and foodservice industry. These accounted for 13.2 percent of all small business loans, and 19.2 percent of total loan dollars. The average loan amount was US $784,768.

Despite these impressive loan numbers, the success rate of a business in this industry tells a different story. Only about 20 percent of hospitality businesses make it to their fifth year, and the average time to pay off a business loan ranges from five to ten years. The failure rates are driven by various factors, including cash-flow problems, a lack of market understanding, and poor financial planning.

So, why do banks continue to approve business loans based on inadequate business plans?

The Need for More than a Business Plan

Each reason for a business failing points to one underlying cause: lack of strategic clarity. In many cases, these businesses began with a standard business plan but skipped the other non-negotiable playbooks truly needed to be successful.

A well-rounded approach to strategic planning includes much more than a business plan.

Aspiring or seasoned bar, restaurant, and hotel operators need to develop feasibility studies to determine whether their business models can succeed in their target market. They also need concept development plans, prototype drawings, brand strategy plans, tech-stack plans, marketing plans, and financial playbooks.

Only after these steps are completed should the final business plan be written.

How Banks Can Improve Loan Success Rates

Banks have an opportunity to reduce their risks significantly—and increase the success rates of the businesses they fund—by requiring more than the completion of a business plan template during the loan approval process.

Instead, they should request detailed feasibility studies, along with the other playbooks, that go beyond the basics.

By working with entrepreneurs to ensure they have true clarity about their business model, market conditions, and financial outlook, banks can reduce default rates, and build stronger partnerships with their clients.

In addition, by encouraging the use of customized plans over templates or AI-generated plans, banks can ensure that they are investing in businesses with a clear path to success.

My Final Thoughts

Yes, a business plan is a vital tool for any entrepreneur, but it must be more than just a template, and lenders need to stop relying on these fill-in-the-blank approaches.

To build a successful business, you need more than a plan on paper; you need clarity, strategy, and a deep understanding of your market and financials. It’s time for banks, financing programs, and even angel investors to get it right and demand more than a standard business plan template. Only then will both the business and the lender see the long-term success they’re striving for.

Perhaps they, too, can then achieve success rates in the 90th percentile.

Image: Canva

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The Tea Lounge inside the lobby of Capella Bangkok, number one on the 2024 World's 50 Best Hotels ranking
by David Klemt David Klemt No Comments

The World’s 50 Best Hotels: 2024

World’s 50 Best Unveils the top Hotels of 2024

by David Klemt

The Tea Lounge inside the lobby of Capella Bangkok, number one on the 2024 World's 50 Best Hotels ranking

The Tea Lounge inside the lobby of Capella Bangkok.

Announced yesterday at The World’s 50 Best Hotels ceremony in London, England, the best hotel in the world features 101 rooms, suites and villas.

In direct contrast to the manic, fast-paced city in which it’s located, Capella Bangkok is a serene oasis. Floor-to-ceiling windows provide panoramic, mesmerizing views of the Chao Phraya River, and allow sunlight to flood into their generous rooms.

Speaking of rooms, their smallest is more than 650 square feet; suites range from over 1,000 square feet to well over 2,000 square feet. Accommodations are more like luxury apartments than mere hotel rooms.

And for those discerning guests who demand only the absolute best? There are two stunning villas to choose from, one of which is the Presidential Villa.

I think we’ve all been curious what hotel, if any, would climb past Lake Como’s Passalacqua to claim the number-one spot. Would the property belong to a massive portfolio? Be a heritage property or a new build? How many keys would the hotel that claims the crown boast?

Will Passalacqua repeat their 2023 feat and hold the top spot for a second year?

We now have the answer to those questions. And we know that while Capella Bangkok will now sit upon the World’s 50 Best Hotels throne for at least the next 12 months, Passalacqua still claimed the number-two spot.

Of course, along with the Best Hotel in the World Award, the 2024 World’s 50 Best Hotels also revealed the best hotels in Africa, Asia, Europe, North America, Oceania, and South America. This year’s ceremony also featured three brand-new awards, which you’ll find below.

American Express Travel One to Watch Award

The Peninsula Istanbul (opened February 2023)

Ferrari Trento Most Admired Hotel Group Award

Aman

SevenRooms Icon Award

Sonia Cheng, CEO of Rosewood Hotels & Resorts

The World’s 50 Best Hotels 2024: 50 to 11

  1. Kokomo Private Island (Yaukuve Levu Island, Fiji)
  2. The Tasman (Hobart, Tasmania, Australia)
  3. Hotel Esencia (Tulum, Quintana Roo, Mexico)
  4. The Brando (French Polynesia)
  5. The Connaught (London, England, UK)
  6. Six Senses Zighy Bay (Dibba, Oman)
  7. Singita Lodges – Kruger National Park (Kruger National Park, South Africa)
  8. Suján Jawai (Rajasthan, India)
  9. Hotel Castello di Reschio (Umbria, Italy)
  10. Gleneagles Hotel (Auchterarder, Scotland)
  11. Le Bristol (Paris, France)
  12. Amangalla (Fort Galle, Sri Lanka)
  13. Royal Mansour, Marrakech (Marrakech, Morocco)(No. 3 Gin Art of Hospitality Award)
  14. Aman New York (New York, New York, USA)
  15. Eden Rock – St. Barths (Saint Barthélemy)
  16. Hotel Bel-Air (Los Angeles, California, USA)
  17. Four Seasons at The Surf Club (Miami, Florida, USA)
  18. Capella Singapore (Singapore)
  19. Four Seasons Madrid (Madrid, Spain)
  20. La Mamounia (Marrakech, Morocco)
  21. The Carlyle (New York, New York, USA)
  22. One&Only Mandarina (Puerto Vallarta, Jalisco, Mexico)
  23. Mount Nelson (Cape Town, Western Cape, South Africa)(The Best Hotel in Africa)
  24. Park Hyatt Kyoto (Kyoto, Japan)
  25. The Siam (Bangkok, Thailand)
  26. The Calile (Brisbane, Queensland, Australia)(The Best Hotel in Oceania)
  27. Rosewood São Paulo (São Paulo, Brazil)(The Best Hotel in South America)
  28. The Lana (Dubai, UAE)
  29. Bulgari Tokyo (Tokyo, Japan)(Nikka Whiskey Best New Hotel Award)
  30. Desa Potato Head (Bali, Indonesia)
  31. Borgo Santandrea (Amalfi, Italy)
  32. Four Seasons Firenze (Florence, Tuscany, Italy)
  33. Maroma (Quintana Roo, Mexico)(Flor de Caña Eco Hotel Award)
  34. Hotel du Cap-Eden-Roc (Antibes, France)
  35. Chablé Yucatán (Chocholá, Yucatán, Mexico)(The Best Hotel in North America)
  36. Hotêl de Crillon (Paris, France)
  37. Four Seasons Bangkok at Chao Praya River (Bangkok, Thailand)
  38. Raffles London at the OWO (London, England, UK)(Lavazza Highest New Entry Award)
  39. Mandarin Oriental Bangkok (Bangkok, Thailand)
  40. Claridge’s (London, England, UK)

The World’s 50 Best Hotels 2024: 10 to One

  1. Nihi Sumba (Sumba Island, Indonesia)
  2. Atlantis The Royal (Dubai, UAE)(The Highest Climber Award: Number 44 in 2023)
  3. Soneva Fushi (Eydhafushi, Maldives)(The Lost Explorer Mezcal Best Beach Hotel Award)
  4. Aman Tokyo (Tokyo, Japan)
  5. Raffles Singapore (Singapore)
  6. The Upper House (Hong Kong, People’s Republic of China)
  7. Cheval Blanc (Paris, France)
  8. Rosewood Hong Kong (Hong Kong, People’s Republic of China)
  9. Passalacqua (Moltrasio, Como, Italy)(Carlo Alberto Best Boutique Hotel Award)(The Best Hotel in Europe)(Number 1 in 2023)
  10. Capella Bangkok (Bangkok, Thailand)(The Best Hotel in the World)(The Best Hotel in Asia)

Congratulations to the team behind Capella Bangkok for earning the number-one spot on the second-annual World’s 50 Best Hotels list!

Main Image courtesy of The World’s 50 Best Hotels. Capella Bangkok image: PanoramicStudio

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An AI-generated hotel bar area with seating next to large windows, with numbers superimposed over the image
by David Klemt David Klemt No Comments

Modern Day Revenue Management for Hotels

Modern Day Revenue Management for Hotels

by Doug Radkey

An AI-generated hotel bar area with seating next to large windows, with numbers superimposed over the image

Note: Image generated by artificial intelligence.

The landscape of hotel revenue management has evolved significantly in recent years, driven by both tech advancements and changing consumer behaviors.

With this in mind, I think now would be a good time to explore these current trends, tools, and strategies in hotel revenue management.

Below, I outline the importance of data analytics, dynamic pricing, and AI in maximizing revenue today, and as we move forward in this industry.

The Evolution of Revenue Management

In the early days of the hotel industry, revenue management was a relatively straightforward affair.

While the overall concept of revenue management originated in the airline industry in the 1980s, it was later adapted by hotels. Traditional practices relied primarily on static pricing models, where room rates were set based on the season, room type, and booking lead time. Rates were adjusted infrequently (often just a few times per year), and they were influenced mainly by historical data documented internally, and the intuition of revenue managers.

Hotels used simple tools such as spreadsheets and reservation logs to track bookings and manage their inventory. The focus was on achieving high occupancy rates rather than maximizing revenue per available room (RevPAR) and the other key metrics that we follow today.

Discounts and promotions were applied sporadically, without a deep understanding of market segments or consumer behavior, to help drive revenue during off-season periods. Group rates and corporate contracts were negotiated based on fixed rates, with little consideration for fluctuating market conditions.

From Static Pricing to Dynamic, Data-Driven Strategies

The transition from those early days to modern revenue management practices began in the late 1990s and early 2000s, driven by tech advancements and increased competition in the accommodation space.

The advent of online travel agencies (OTAs), real-time booking systems, and sophisticated data analytic tools transformed how hotels approached their pricing and inventory management.

So, what’s the modern approach?

  • Data-Driven Decision Making: The incorporation of advanced data analytics revolutionized revenue management. Hotels began leveraging large datasets from various sources, such as reservation systems, customer relationship management (CRM) software, and market intelligence platforms. This data-driven approach enabled more accurate forecasting, segmentation, and pricing strategies. Revenue managers could now analyze booking patterns, guest preferences, and demand fluctuations to make informed decisions.
  • Dynamic Pricing Models: Dynamic pricing involves adjusting room rates continuously based on real-time market demand, competitor pricing, and other external factors. This approach allows hotels to maximize revenue by selling the right room to the right guest at the right time and price. Dynamic pricing models consider various data points, including booking pace, market trends, weather, and special events, to optimize their recommended rates.
  • Automation and Real-Time Adjustments: Modern revenue management systems (RMS) introduced automation, allowing hotels to implement real-time rate adjustments. These systems use algorithms and machine learning to analyze data and update rates across all distribution channels automatically. This automation minimizes manual errors, and ensures consistent pricing across platforms, enhancing the hotel’s ability to respond to market changes quickly.
  • Focus on Total Revenue Management: While traditional revenue management focused primarily on room revenue, modern practices embrace a more holistic view known as total revenue management. This approach considers all revenue streams, including food and beverage, spa services, and other on-property offerings. By optimizing pricing and promotions across all areas, hotels can now maximize total revenue and profitability.

The Importance of Data Analytics

Data analytics involves the systematic analysis of data to uncover patterns, correlations, and trends that inform strategic decisions.

Sounds fairly important, right? In the hospitality industry, data analytics helps you understand market dynamics, predict demand, and tailor your hotel’s offering to meet guest needs. This level of analysis is paramount for developing effective revenue management strategies that maximize profitability.

One of the primary functions of data analytics in hotel revenue management is demand forecasting. By analyzing historical booking data, seasonal trends, and external factors such as local events, weather, or economic conditions, hotels can predict future demand accurately. This forecasting through data analytics enables hotels to adjust room rates more dynamically, optimize inventory allocation more efficiently, and implement targeted marketing campaigns that drive results.

Modern analytics platforms have revolutionized hotel revenue management by providing sophisticated tools for data analysis, strategic planning, and dynamic pricing. Atomize RMS stands out as a prime example of an advanced analytics tool that leverages data-driven decision-making to optimize hotel performance through dynamic pricing. This cloud-based revenue management system (RMS) uses sophisticated algorithms and machine learning to provide real-time pricing recommendations, as well as market insights.

Atomize enables hotels to make informed decisions based on real-time market conditions and predictive analytics by leveraging machine learning and big data. This data-driven approach leads to more precise pricing strategies, optimized inventory management, and improved profitability.

Moreover, the system’s ability to automate and streamline revenue management processes reduces the risk of human error, and frees up time for hotel staff to focus on other critical aspects of operations, such as providing a memorable guest experience, and elevating service quality.

The Role of Artificial Intelligence (AI)

Artificial Intelligence (AI) has further revolutionized the field of revenue management in the hotel industry, offering advanced capabilities that enhance both efficiency and profitability. Another AI-powered RMS provider is Duetto Cloud’s Game Changer, designed to analyze large datasets, identify patterns, and make real-time decisions.

One of the key capabilities of an AI-powered RMS is the automated pricing optimization. The system monitors market conditions continuously and adjusts room rates based on real-time data, with limited rules in the back-end. This dynamic pricing approach allows hotels to capitalize on fluctuations in demand, ensuring that they are charging the optimal rate at any given time.

These accurate forecasts can enable hotels to plan more effectively, manage inventory, and allocate resources more efficiently.

For example, AI can help predict when a hotel is likely to experience high demand and adjust staffing levels accordingly, ensuring optimal service quality. Additionally, accurate forecasting helps in identifying potential periods of low occupancy, allowing hotels to implement targeted marketing campaigns and promotional offers to boost bookings.

Beyond pricing and forecasting, AI-powered RMS can also enhance the guest experience through personalization. By analyzing guest data such as booking history, preferences, and feedback, AI systems can tailor offers and recommendations to individual guests.

For instance, an advanced RMS can identify a guest’s preference for specific room types, amenities, or dining options and use this information to provide personalized packages or upsell relevant services.

As AI technology continues to evolve, its role in revenue management is expected to grow, offering even more sophisticated capabilities and insights for hotels. Embracing AI-powered RMS now is going to be essential for hotel operators who are looking to compete and win in today’s fast-paced and data-driven market.

Integrating Revenue Management with Other Hotel Operations

As mentioned above, modern hotel revenue management is moving away from the siloed approach of focusing solely on room-based revenue. Increasingly, that outdated method is being replaced by a more holistic perspective that encompasses the entire guest experience.

This shift necessitates cross-department collaboration, aligning revenue management with sales, marketing, and operations to create cohesive strategies that optimize total revenue. Integrating efforts across departments means hotels can enhance their revenue streams and also provide a seamless and enriching experience for their guests.

To maximize total revenue, hotels must look beyond room revenue to optimize ancillary revenue streams, such as food and beverage (F&B), spa services, events, and so much more. This approach, known as total revenue management (TRM), involves a comprehensive strategy that considers all aspects of the guest experience.

For example, coordinating F&B with revenue management ensures that the on-property restaurant reservations and event bookings align with the hotel’s overall occupancy and pricing strategies.

The obvious and ultimate goal of cross-department collaboration is to enhance the guest journey and experience. Aligning efforts across revenue management, sales, marketing, and operations ensures hotels can create a seamless and personalized experience for their guests.

This can include personalized room amenities, customized dining options, and exclusive access to hotel facilities. Engaging with guests before, during, and after their stay through targeted communications and personalized offers can further enhance their experience and encourage repeat visits.

Looking Ahead

As you can see, modern hotel revenue management has become an intelligent discipline driven by data analytics, dynamic pricing, and artificial intelligence (AI). These elements are really becoming a non-negotiable for optimizing revenue, enhancing guest experiences, and maintaining a competitive edge.

Data analytics provides deep insights into market trends, guest behaviors, and demand patterns, enabling more accurate forecasting and strategic decision-making. Dynamic pricing, powered by real-time data and AI, allows hotel operators to adjust room rates fluidly, maximizing revenue by responding to market conditions.

AI further enhances revenue management through advanced capabilities such as predictive analytics and personalized guest services, all of which streamline operations and improve efficiency when integrated with other departments within your hotel.

Looking ahead, the future of hotel revenue management promises exciting innovations and trends. As AI and machine learning technologies continue to advance, we can expect even more precise forecasting models, and highly personalized guest experiences. The integration of big data from diverse sources, including social media, online reviews, and IoT devices, will provide richer datasets for analysis, leading to more nuanced insights and strategic opportunities.

Additionally, the increasing importance of TRM and revenue per available guest (RevPAG) will encourage hotels to optimize not just room revenue but also ancillary streams such as dining, spa services, events, and more.

Move Forward Today

For hotel operators like yourself, you must embrace and invest in advanced analytics tools, AI-powered RMS, and dynamic pricing strategies.

Adopting a data-driven approach will position you to better understand your hotel’s market, anticipate demand fluctuations, and tailor your offering to meet guest expectations.

This proactive stance will not only drive revenue growth but also enhance your brand equity.

Stay ahead of the curve and adopt cutting-edge technologies and strategies to navigate the complexities of the modern market and ensure long-term success. Now is the time to invest in the future, leverage the power of data and AI, and lead your hotel to new heights of profitability and excellence.

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An AI-generated image of two silver balloons forming the number 15, superimposed over the interior of an upscale restaurant
by David Klemt David Klemt No Comments

15 Years of Consulting: Lessons Learned

15 Years of Consulting: Lessons in Adaptability, Innovation, and Resilience

by Doug Radkey

An AI-generated image of two silver balloons forming the number 15, superimposed over the interior of an upscale restaurant

Note: AI-generated image.

I made a life-altering decision to start consulting in August of 2009, and over the past 15 years I’ve accumulated more than 30,000 hours of experience.

Over the past 15 years and the span of those tens of thousands of hours, I’ve contributed to the creation of more than 270 new concepts. Further, these concepts boast a long-term success rate of over 98 percent.

Reaching these achievements, along with fifteen years in business, hasn’t been easy.

There have been many ups and many downs, just like any other business. There are times of standing high on a mountain, and times of wanting to throw in the towel.

One key element I have learned over the years is that success goes far beyond having a great vision and concept; it requires passion, precision, and execution.

This journey has been filled with pivotal moments, and by what I can boil down to as three fundamental and invaluable lessons in adaptability, innovation, and resilience. Each of those lessons are now rooted in KRG Hospitality’s core values of being creative, cultivated, and connected.

The lessons I’ve learned over the course of 15 years and more than 270 new concepts can help you and your business start, stabilize, and scale.

The Power of Adaptability

Adaptability in business refers to the ability to adjust and respond to changing circumstances, market conditions, and guest expectations. It is the capacity to pivot strategies, embrace new technologies, and innovate to stay both relevant and competitive.

For me, adaptability has meant developing a mindset of openness to change and a willingness to experiment with new approaches.

It is not just about reacting to changes as they happen but anticipating shifts in the market proactively, while preparing to meet new challenges. In business, this means being flexible in your operations, resilient in the face of adversity, and innovative in problem-solving.

An adaptable hospitality business is one that can adjust its offerings quickly, refine its services effectively, and even overhaul its business model if necessary. As importantly, such a business can accomplish all of that without any long-term disruption to its profit channel.

To embrace adaptability, you must foster a culture that values learning and continuous improvement. This involves encouraging your employees to share their ideas and feedback, experimenting with new systems, technologies and processes, and being open to constructive criticism.

It also requires a deep understanding of the market and guest needs, allowing your business to pivot swiftly and efficiently when necessary.

Adaptability is also about having a growth-based mindset. This type of mindset involves seeing challenges as opportunities for growth rather than obstacles. By being adaptable, your business can stay ahead of the competition, meet changing guest expectations, and capitalize on new opportunities.

In a world where change is the only constant, embracing adaptability is not just an option, it’s a necessity for long-term success. As entrepreneurs, cultivating this trait can lead to innovative solutions, greater efficiency, and a more sustainable long-term business model.

Embracing Innovation

Embracing innovation is about thinking creatively, challenging the status quo, and finding novel solutions to existing problems.

In this industry, innovation can manifest in various forms, such as adopting new technologies, offering unique guest experiences, or implementing sustainable practices. As an entrepreneur and leader in this industry, embracing innovation is crucial for staying relevant.

You will begin to see here how each of these lessons truly go hand in hand. For me, however, innovation goes beyond mere invention; it involves applying new concepts and ideas in practical and impactful ways.

In hospitality, innovation can be product-driven, such as developing a new menu item or room service feature. Or it can be process-driven, such as streamlining operations through a new technology integration. Innovation can also be guest-centric, focusing on enhancing the overall guest experience through personalized services or tailored offerings.

For example, the introduction of mobile check-in and digital concierge services in hotels revolutionized the guest experience, offering convenience and personalization.

Similarly, restaurants have innovated by incorporating immersive dining experiences that engage all of our senses. These innovations not only attract new guests but also differentiate a business in a crowded marketplace.

How to Embrace Innovation

To embrace innovation, your business must cultivate a culture that encourages creativity and experimentation. This involves creating an environment where employees feel empowered to suggest new ideas, and are not afraid to take risks.

Leadership plays a critical role in setting the tone for innovation, providing the necessary resources, and fostering an open-minded atmosphere.

One practical way to embrace innovation is to stay up to date about industry trends and technological advancements. Attending industry conferences and participating in webinars and mastermind groups can provide valuable insights and inspiration.

Additionally, businesses in this industry should invest in research and development (R&D) to explore new opportunities and test innovative concepts.

Finally, embracing innovation requires a willingness to adapt and iterate. Not every new idea will be successful, but the process of trying, learning, and refining is critical for continuous growth.

Your business should establish mechanisms for evaluating the effectiveness of new initiatives, and be prepared to pivot when necessary.

Fostering a culture of creativity, staying informed about trends, and actively seeking new opportunities helps your business innovate in ways that enhance the guest experience, and drive long-term financial success.

Driving Resilience

Resilience in business refers to the ability to withstand and recover from challenges, setbacks, and unexpected changes. It involves maintaining stability and continuity while adapting to new circumstances.

In further business context, this includes the ability to manage financial pressures, operational disruptions, shifts in consumer behavior, or even personal setbacks. Resilience also encompasses the mental and emotional strength to stay focused and positive in the face of adversity.

Resilient businesses are not immune to problems; rather, they are equipped to handle them effectively, and learn from the experience.

In my experience, you must be willing to prioritize building strong relationships with guests, community partners, and industry peers in order to embrace innovation. These connections provide a support network that can offer assistance, advice, and resources during tough times. Collaborations with local businesses and partnerships with suppliers can also provide you with a critical support line.

Real-World Resilience

Personal anecdotes often serve as powerful illustrations of resilience, providing real-world examples of overcoming adversity and demonstrating the strength required to persevere. Real-life examples show that resilience is not just an abstract concept but a practical quality that can be developed and applied in everyday life.

These stories often detail the emotional, mental, and physical hurdles faced, and the strategies used to overcome them.

For example, a story about recovering from a business failure can illustrate the importance of maintaining a positive mindset, and seeking new opportunities. Perhaps it is a career setback, a health challenge, or a natural disaster. Regardless, these personal stories often include reflections on the lessons learned from facing adversity.

These reflections can range from practical advice, such as the importance of planning and preparation, to emotional insights, such as the value of gratitude, and the strength found in vulnerability. Stories of resilience serve as a reminder that setbacks and challenges are a natural part of life, and that it is possible to overcome struggles with determination and support.

Lastly, building resilience also involves cultivating a positive and proactive mindset. It’s imperative to view challenges as opportunities to innovate and improve. This can mean reevaluating business models, exploring new revenue streams, or investing in your people for further training and development.

Resilient businesses are not just reactive, they are proactive in anticipating potential issues and preparing for them. By building strong relationships, learning from setbacks, and maintaining a positive outlook, your business can navigate challenges and emerge stronger.

Core Values in Action

Core values are the fundamental beliefs and guiding principles that shape the culture, decision making, and identity of your business. They are the compass that directs the actions and attitudes of everyone within your organization, from leadership to frontline employees.

In the hospitality industry, core values are particularly crucial as they also define the guest experience and set the tone for interactions with guests, employees, partners, and the community.

For entrepreneurs and leaders in this industry, developing and embracing core values is crucial for creating a cohesive and purpose-driven business. Core values not only guide strategic decisions but also inspire and motivate the team, ensuring alignment with the mission and vision.

Over the past 15 years, our journey in the industry has been guided by these three core values: Creative, Connected, and Cultivated. These values have aligned perfectly with the lessons I’ve learned and shared about being resilient, innovative, and adaptable.

Our Core Values

Creativity is at the heart of innovation. It involves thinking outside the box, challenging conventions, and finding unique solutions to problems.

In the hospitality industry, creativity is needed for differentiating a brand and providing memorable experiences. Our creative approach has allowed us to design distinctive concepts, develop engaging strategies, and craft personalized staff and guest experiences.

Embracing creativity means exploring new ideas constantly, and staying open to unconventional approaches.

Being connected refers to fostering strong relationships with guests, community partners, and industry peers. It’s about building a network of support and collaboration that extends beyond the business itself.

In times of adversity, these connections have been invaluable. Whether it’s partnering with local businesses during economic downturns or engaging with guests through personalized communication, staying connected has helped us navigate challenges and seize on potential opportunities.

Lastly, cultivation is the process of continuous growth and improvement. It involves nurturing talent, refining processes, and striving for excellence.

In our experience, being cultivated means committing to lifelong learning, and embracing a growth-based mindset. This value has driven our dedication to professional development, the quality in our deliverables, and operational efficiency.

To embrace core values, your business must integrate them into every aspect of operations. This includes staff onboarding practices, guest interactions, and strategic decision making. You and your leaders should model these values and encourage employees to do the same.

Demonstrating and reinforcing your core values consistently allows you to create a strong, unified culture that resonates with both employees and guests.

And the end of the day, you have to remember that core values provide direction, inspire action, and foster a sense of purpose.

Conclusion

As I sit back and reflect on the lessons learned from 15 years of consulting in the hospitality industry, it’s clear that the journey has been shaped by the powerful forces of adaptability, innovation, and resilience.

These experiences have not only defined our approach but have also laid the foundation for future endeavors. The hospitality landscape evolves continuously, with new challenges and plenty of opportunities on the horizon. From technological advancements to shifting guest preferences, the industry is truly poised for positive transformation.

Looking ahead, however, it’s crucial for businesses to remain flexible and open to change.

For us, continuing to embrace adaptability means staying agile in the face of uncertainty, and being ready to pivot when necessary. Innovation will continue to play a pivotal role, driving new concepts and experiences that set businesses apart.

Resilience, as always, will be the foundation that supports us through trials and tribulations, ensuring that we meet the characteristics needed to win.

I strongly encourage you to internalize these three qualities in your own journey. Whether you’re an entrepreneur, a coach or consultant, or an industry professional, integrating them into your own set of core values—be it creativity, connection, cultivation or any other set of values—will anchor you in your pursuit.

These values are not just guiding principles but also a source of strength and inspiration.

Embracing adaptability, innovation, and resilience, and staying true to our core values, has made us confident in navigating this ever-changing terrain with purpose over the next 15 years.

Who’s with us?

Image: DALL-E

 

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An image from the 2024 Tales of the Cocktail keynote session entitled "How Bartenders Grow Your Brand: The Findings"
by David Klemt David Klemt No Comments

Tales Enters Their Fundraising “Era”

Tales of the Cocktail Enters Their Fundraising “Era”

by David Klemt

An image from the 2024 Tales of the Cocktail keynote session entitled "How Bartenders Grow Your Brand: The Findings"

An image from the 2024 Tales of the Cocktail keynote session entitled “How Bartenders Grow Your Brand: The Findings”

Tales of the Cocktail Foundation is partnering with Children’s Hospital New Orleans to raise much-needed funds, and they want your help.

All proceeds this dynamic duo raise via people’s generosity will benefit TOTCF and CHNOLA directly.

By now, you know Tales. While we all look forward to their annual gathering of the bartender community, Tales works all year to advocate for and support hospitality. However, you may be unfamiliar with CHNOLA if you live outside of Louisiana.

Like TOTCF, CHNOLA is a non-profit organization. Next year, the pediatric acute care children’s teaching hospital will celebrate its 70th anniversary. Perhaps unsurprisingly, CHNOLA operates in affiliation with the Louisiana State University Health Sciences Center. In operation for nearly 100 years, LSU Health is home to several key medical schools, and patient care clinics.

Serving those who are just days old to 21 years of age, CHNOLA is a crucial member of the New Orleans community. In fact, as the only children’s hospital in the LCMC Health network, CHNOLA serves not only NOLA, not only the state of the Louisiana, but the entirety of the Gulf Coast region.

Supporting TOTCF and CHNOLA is rewarding in and of itself. But doing so via the dedicated link below will enter one winner per raffle (there are two) for two suite tickets for the Taylor Swift Eras concert being held on October 26 in New Orleans.

You’ll find more details below. Good luck to all who give and enter, and cheers!

TALES OF THE COCKTAIL FOUNDATION ANNOUNCES TAYLOR SWIFT ERAS TOUR TICKET RAFFLE

Two sets of two (2) suite tickets to be raffled off to benefit Tales of the Cocktail Foundation and Children’s Hospital New Orleans

NEW ORLEANS, LA (August 22, 2024)—In support of Tales of the Cocktail Foundation’s (TOTCF) mission to educate, advance, and support the global hospitality industry, the non-profit is thrilled to announce that they are in their fundraising era alongside Children’s Hospital New Orleans (CHNOLA) to raffle two sets of two (2) suite tickets to Taylor Swift’s October 26 Eras concert in New Orleans. Two separate drawings will be held–September 13 and September 20–each selecting one winner to receive a set of two (2) suite tickets for each raffle. All proceeds will directly benefit TOTCF and CHNOLA, additional details and a link to purchase tickets may be found on the dedicated raffle page.

“Following our wildly successful annual Tales of the Cocktail® 2024 conference, we couldn’t be more honored to partner with Children’s Hospital New Orleans on this fun and impactful fundraising effort,” said Tales of the Cocktail Foundation CEO Eileen Wayner. “We are thrilled to welcome Taylor Swift to the Crescent City with New Orleans’ globally recognized hospitality, and send two lucky raffle winners and their guests to enjoy her show.”

“We are incredibly grateful to Tales of the Cocktail Foundation and all of the many raffle participants for choosing to support the vital mission of Children’s Hospital New Orleans. Your generous support helps us care for every child in our community, including some of our most vulnerable,” said Lucio A. Fragoso, President and CEO, Children’s Hospital New Orleans. “Each chance to win helps us continue to provide expert pediatric healthcare for every child, regardless of the family’s ability to pay.”

Drawing Dates:

Raffle 1 – September 13, 2024 at 2 pm CST

Raffle 2 – September 20, 2024 at 2 pm CST

The raffle is conducted by TOTCF, operated under Louisiana Gaming License No. L0010538.

For more information on Tales of the Cocktail, please visit the Tales of the Cocktail Foundation website, Instagram, Twitter, and Facebook.

For more information on Children’s Hospital New Orleans, please visit the Children’s Hospital New Orleans website, Instagram, Twitter, and Facebook.

ABOUT TALES OF THE COCKTAIL FOUNDATION:

Tales of the Cocktail Foundation is a non-profit organization that educates, advances, and supports the global hospitality industry and creates a lasting impact in our host communities. Tales of the Cocktail Foundation is the global leader in spirits education and a platform to tackle issues facing the industry. The pillars of the Foundation are to Educate, Advance, and Support the hospitality industry through programs that benefit individuals and organizations in the community and to make a lasting impact in communities that host our events.

ABOUT CHILDREN’S HOSPITAL NEW ORLEANS

For nearly 70 years, Children’s Hospital New Orleans has delivered expert care for children across our state and region. As the first and largest non-profit, freestanding children’s hospital in Louisiana, we rely on the generous support of our donors, friends, and community to provide expert care for every child, regardless of his or her family’s ability to pay.

A healthier, happier future for our children is possible with your support. Building an extraordinary future for our kids starts by delivering the best possible healthcare for children right here in Louisiana. We invite you to join us in our unwavering commitment to change the health of the next generation.

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by David Klemt David Klemt No Comments

Maximizing a Hotel’s Off-Season

Maximizing a Hotel’s Off-Season

by Doug Radkey

AI-generated image depicting a hotel owner or executive in the lobby of their property

Note: AI-generated image.

Nearly every hotel experiences an off-season during the calendar year, a period of time when they can see occupancy rates drop by as much as 30 percent.

But when did it become normalized to sit back and view this significant dip as acceptable?

With the right strategies, these periods can become opportunities for growth. Or in the very least, reduce the occupancy drop to five or ten percent.

What would that difference do to your annual outcome?

Forecast Your Off-Season

Hotel operators, independent and chain, should be mindful of the off-season, forecast demand effectively, and leverage local opportunities. This change in approach can help hotels develop comprehensive strategies to maximize revenue and occupancy during traditionally slow periods.

Being mindful of this period allows you to develop strategies proactively to mitigate its impact. This approach involves recognizing the specific months or times of year when demand traditionally drops, which can vary significantly depending on your location and target market.

For instance, a beach resort may experience a lull during the colder months, whereas an otherwise busy hotel located in the heart of a large city might see fewer guests during the summer when business travel decreases. Identifying these patterns helps operators better prepare and implement measures to attract guests and maintain profitability during these quieter times.

Effective forecasting involves analyzing historical data to identify trends and patterns in occupancy rates, daily rate, and revenue metrics. Tools such as Atomize, a dynamic revenue management system (RMS), and Mews, a property management system (PMS), can provide valuable insights by processing large amounts of data and highlighting seasonal fluctuations.

Predicting slow seasons accurately gives operators the ability to adjust their marketing strategies, pricing models, and operational plans. Doing so optimizes performance, and minimizes the negative impact of a reduction in demand.

Diversify Your Target Market

One of the most effective strategies for maximizing hotel revenue during the off-season is diversifying your target market. Broadening the scope of a hotel’s potential guests attracts new segments that may not have been the primary focus during peak periods.

This can include targeting niche markets such as wellness travelers, eco-tourists, digital nomads, and local residents looking for staycations. Each of these segments has unique needs and preferences an operator can cater to with specific packages or experiences.

To reach these off-season niche markets effectively, hotels need to create customized marketing campaigns that speak to their interests and needs directly. Personalized, targeted marketing can enhance the appeal of your hotel to these segments significantly.

For example, digital nomads, who seek remote working environments, can be attracted with packages that include high-speed internet, comfortable workspaces, and discounted long-term stays. Marketing campaigns for this segment could highlight the hotel’s co-working spaces, business amenities, and serene surroundings conducive to productivity.

When targeting local residents looking for staycations, campaigns could emphasize the convenience and luxury of a local getaway, offering special weekend packages, family deals, or romantic escapes.

This strategic approach may not only fill rooms but also build brand equity among niche segments, ensuring a steady flow of revenue throughout the year.

Embrace Group Bookings

Group bookings can be an effective strategy for filling rooms quickly, and generating revenue during the off-season.

Targeting groups helps hotels secure multiple reservations at once, thereby stabilizing occupancy rates, and mitigating the impact of seasonal downturns.

Further, group bookings encompass a wide range of categories, including corporate events, conferences, weddings, family reunions, and social gatherings. Each of these groups has specific needs and expectations. Operators can meet these needs through tailored packages that include group discounts, meal plans, and activity options.

Going further, operators can appeal to these groups by partnering with local tour operators and community organizations to promote personalized packages.

Dynamic Pricing Strategies

Dynamic pricing involves adjusting room rates in real-time based on demand, competition, and other market factors.

Leveraging revenue management software and data analytics helps hotels optimize pricing to attract more bookings while maintaining profitability. This flexible approach ensures that room rates are always competitive and aligned with current market conditions, filling rooms that might otherwise remain vacant. These pricing strategies can be extended into bundles and experiences to showcase additional value.

Combining accommodation with additional services and amenities offers more value to guests, making their stay more appealing. These bundles not only enhance the guest experience but also encourage longer stays, and increased spending on-site.

Further, curated experiences can range from culinary workshops and wellness retreats to cultural tours and outdoor adventures. Understanding the preferences of the targeted or niche off-season market should lead to the creation of unique and memorable experiences that go beyond standard accommodation offerings.

For example, a hotel might collaborate with a local chef to offer cooking classes, or with artists to provide guided art workshops. Curating guest experiences not only differentiates the hotel from competitors but also provides added value that can justify higher room rates during the off-season.

Lastly, a dynamic pricing strategy could be used to encourage short-term and long-term stays beyond the typical three- to seven-night range.

For short-term stays, offering discounted rates for extended weekends or mid-week stays can appeal to both leisure and business travelers looking for a quick escape. With long-term stays, hotels can provide special rates and amenities for guests staying multiple weeks or even months. Doing so can attract digital nomads, business travelers on extended assignments, or families relocating to the area.

Strategic Adjustments

Outside of trying to build business, the off-season provides an ideal opportunity for hotels to review and adjust their operations. This ensures they are running efficiently and effectively, and preparing themselves for the next peak season.

During these quieter periods, hotels should conduct comprehensive reviews of operational efficiencies to identify areas where processes can be streamlined.

This may involve analyzing housekeeping routines, front desk procedures, and food and beverage operations to find ways to reduce waste and improve service delivery. Focusing on these improvements enhances overall efficiency, which not only saves costs but also improves the guest experience.

Reviewing and updating standard operating procedures (SOPs) is another crucial task that can be undertaken during the slow season. Hotels can take this time to involve staff in the review process, gathering feedback on current procedures and identifying any gaps or inefficiencies. Updated SOPs can then be communicated and implemented through targeted training sessions, ensuring that all team members are aligned, and equipped to provide the highest standard of service.

The off-season is an excellent time to schedule one-on-one meetings with team members, and comprehensive training sessions that include refreshers on existing protocols, along with introductions to new technologies or service standards. Investing in staff development not only improves service quality but also boosts employee satisfaction and retention.

Technology plays a pivotal role in modern hospitality management, and the slow season is the perfect time to review and upgrade technological systems. Whether it’s enhancing the property management system (PMS), implementing a new guest (customer) relationship management (CRM) tool, or upgrading the hotel’s Wi-Fi infrastructure, these technological improvements can enhance operational efficiency and guest satisfaction significantly.

Additionally, hotels can explore new technologies such as AI-driven analytics and automated check-in systems to stay ahead of industry trends and improve the guest experience.

Review Playbooks

The off-season is a strategic time to review and adjust various playbooks that guide a hotel’s operations and strategy.

Reviewing the Brand Strategy Playbook ensures that the hotel’s identity, values, and positioning remain strong and relevant. Operators can update Marketing Playbooks to reflect new trends and campaigns tailored to attract guests during the next 12 months. Business Playbooks should be assessed to ensure all operational plans align with the current market environment and organizational goals. Financial Playbooks are critical for maintaining financial health, and reviewing them helps identify cost-saving opportunities and areas for investment.

Regularly updating these playbooks maintains strategic clarity and agility, ensuring a hotel remains ready to capitalize on opportunities as they arise.

Utilize the off-season to build occupancy, leverage revenue opportunities, adjust operations, update SOPs, enhance training programs, and upgrade technology. Doing so helps a hotel to optimize its performance.

This proactive approach ensures that when the busy season returns, the hotel is not only coming out of the off-season with better cash flow, but operating smoothly and efficiently, providing an exceptional guest experience.

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by David Klemt David Klemt No Comments

Text, Email & Social Media Marketing

Text, Email & Social Media Marketing: Which is Best?

by David Klemt

A woman wearing a black-and-white-striped top checking her smartphone

Text-message marketing versus email marketing: which is best for your business?

One of the key topics that SevenRooms addresses in the first of their annual trends report is how operators can make the most of their marketing efforts.

Today, the primary marketing channels are text/SMS, email, and social media. An operator needs to understand their guests to know which will be most effective for their business.

Or, more accurately, an understanding of one’s guests is the key to leveraging a mix of those channels effectively.

An operator must consider their target audiences, and how they tend to engage with brands. Further, consideration must be given to people’s relationships with their phones.

As a real-world example, one of our clients’ guest pools skews significantly toward Baby Boomers. When discussing marketing strategy, the client expressed a concern when text marketing came up. They stated that their older guests would likely push back against this form of marketing.

However, no generation is a monolith. Therefore, I’ll be speaking in generalities when it comes to generational cohorts and their behavior.

Marketing Channel Engagement

Generally speaking, younger generations don’t seem to find text marketing invasive. Younger consumers are also used to engaging with and discovering brands and businesses via social media.

In contrast, an operator may find that their older Gen X and Baby Boomer guests prefer email marketing. It’s important to bear in mind that older generations also consume social media content. For example, SevenRooms findings show that 24 percent of Gen X and Baby Boomers can be influenced to visit a restaurant via F&B posts. However, these generations appear to engage with menu posts from restaurants they already follow.

That last bit of information tells me that older guests follow restaurants they’re considering visiting or have visited previously. Per SevenRooms data, the same goes for Millennials. That said, 43 percent of this generation are influenced by posts that showcase a restaurant’s personality.

Interestingly, just over half of Gen Z is influenced via video content from businesses they don’t already follow. These accounts are pushed to them via a platform’s engagement and discovery algorithms.

With the caveat that I’m painting different generations with broad strokes, posts that show off the menu may work best to engage older consumers. Posts that illustrate the personality of a brand and its team may resonate best with Millennials, and video content is king for grabbing the attention of younger consumers.

Businesses targeting a mix of consumers will want to develop a varied social media strategy. Content should consist of still photos and video that show off menu items, team members, and what guests can expect during a visit. Engagement will show an operator which posts are resonating the most with their followers and guests.

So, which marketing channel is best? All of them, when combined strategically.

An Effective Mix

Speaking of developing an effective strategy, SevenRooms asked operators about their social media marketing results.

Since the point behind marketing is to increase bookings to boost traffic and revenue, SevenRooms looked into which social media content achieved the best results.

Nearly 40 percent of operators surveyed said that organic posts result in the most bookings. This is followed by paid social media advertising, at 33 percent. Just over a quarter of operators surveyed pointed to influencer content as driving the greatest number of bookings.

One percent of operators say they don’t track their social media marketing results. For obvious reasons, this isn’t part of a winning strategy. If the results of an operator’s marketing efforts can’t be tracked, how can they know what works, and if they need to change an element of their strategy (such that it is)?

Nuance

As SevenRooms makes clear in their 2024 Restaurant Trends and Diner Expectations report, a multi-channel marketing strategy is a key to success.

Results will boil down to more than texting younger consumers and emailing older consumers. SevenRooms suggests what we at KRG Hospitality would also recommend: nuance.

An actual strategy is necessary, and that means being intentional with each marketing channel.

For context, an operator is likely best served to keep marketing text messages short. So, think reservation availability due to cancellations or no-shows. Email is a marketing channel best suited to longer messages. When it comes to social media marketing, a restaurant or bar’s social accounts should be viewed as relationship-building avenues.

In closing, an operator’s multi-channel marketing strategy requires a multi-pronged approach. Each channel must be leveraged differently. Text marketing shouldn’t be used the same way as email marketing messages, and neither should be used in the same way as a brand’s social accounts. When it comes to those accounts, a mix of posts is most effective for reaching different types of consumers.

The real keys are for operators to know who they’re targeting, track their marketing efforts, and develop an understanding of their guests. Throwing things against the wall to see what sticks just creates a mess; operators must be intentional in their marketing and operations to convert guests and achieve long-term success.

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Guests dining in a light, bright restaurant featuring a glass ceiling and hanging plants
by David Klemt David Klemt No Comments

SevenRooms Drops Extensive 2024 Report

SevenRooms Drops Extensive 2024 Report

by David Klemt

Guests dining in a light, bright restaurant featuring a glass ceiling and hanging plants

Today, we’re taking a look at the first-annual trends report from marketing and operations platform SevenRooms, which focuses on the guest experience.

To gain an understanding of the current state of affairs in America, SevenRooms analyzed the product data of more than 3,000 US clients. Further, the platform engaged over 250 operators, and 1,000 consumers.

The result is a data-rich report that offers helpful insights for operators.

Two findings are particularly interesting to me, and the team here at KRG Hospitality. One, it appears that Americans are back to seeking out their third spots. As a refresher, a third spot, space, or place is where one spends time when away from home or work. Consumers tend to be loyal to these places, making them part of their everyday or weekend routine.

Two, younger consumers are leading the way in terms of restaurant visits. Per SevenRooms, 38 percent of Millennials visit restaurants five or more times per month. Gen Z is also visiting restaurants frequently, with 24 percent visiting five times or more. However, that number climbs to 45 percent for Gen Z when it comes to three or four monthly visits. Among Millennials, 33 percent visit restaurants three or four times per month.

That tells us that younger consumers are eager to socialize, and restaurants can fulfill that desire. As savvy operators know, a person can eat or drink at home; food and beverages are just excuses to get out, hang out, and meet new people.

This also tells us that operators need to ensure they’re ticking several boxes to resonate with younger guests: value, convenience, and personalization. I’ll add that consumers have shown they want to support brands with values that align with their own.

There are many more insights in SevenRooms’ new report, which you can find below. To view the report in its entirety, click here.

SEVENROOMS RELEASES 2024 RESTAURANT TRENDS AND DINER EXPECTATIONS REPORT FOR THE HOSPITALITY INDUSTRY

Annual report gives an inside look at how restaurants are delivering better guest experiences and personalizing their marketing in the age of AI and automation

NEW YORK (August 6, 2024) – SevenRooms, the leading CRM, marketing and operations platform for growing restaurants, today released its first annual trends report, “2024 Restaurant Trends and Diner Expectations,“ highlighting how restaurants are filling the need for ‘third places’, connection spots outside the home and workplace, what consumers expect from their dining experiences, and how restaurants are leveraging AI and automation to keep diners coming back.

The study, commissioned through independent third-party research firm Censuswide, examines consumer and foodservice operator insights, alongside data from SevenRooms restaurant customers. It emphasizes the importance of restaurants understanding their guests and providing experiences and value to consumers, including marketing and tech trends that operators are paying attention to.

Diners Expect More From Restaurants

While it’s no surprise that diner expectations have evolved in recent years, consumers across generations and cities share key expectations when dining out — they’re looking for convenience, personalization and value from brands they trust. Restaurants must nail all aspects of the guest experience, from hospitality and service to ambiance and atmosphere, to transform diners into brand ambassadors and get them to bring their dollars back more often.

When looking across generations, Millennials are driving a dining resurgence – dining out most frequently with 38% saying they dine out more than 5x a month. They are seeking more from their restaurant visits, and are willing to spend more for elevated experiences, like theatrical elements or high-end items like caviar. For these experiences, Americans are willing to spend up to $63 per person with 45% of Gen Zers open to paying even more. As diners focus on the quality over quantity of their experiences, that means restaurants must do more to keep those diner dollars. Dining upgrades consumers are willing to spend more fall into three categories – experiential, luxurious and personal, including:

  • Experiential (e.g. tableside martini cart; fish presentation or deboning, etc.)
    ○ Dallas – a menu item with some theater (86%)
    ○ Washington DC – a menu item with some theater (71%)
  • Personal (e.g. birthday dessert; welcome drink)
    ○ Chicago – a mocktail or personalized item (55%)
  • Luxurious (e.g. caviar, freshly shaved truffles, seafood tower)
    ○ Los Angeles – high-end items like caviar (55%)
    ○ New York – high-end items like caviar (48%)

Outside of these experiential offerings, restaurants must also capitalize on influential factors that bring diners back. For example, 34% of Gen Zers want personalized surprises in service like a free dessert. Meanwhile, 26% of Millennials care about the ease of making a reservation and 24% of Gen Xers consider the rapport they develop with front-of-house staff. Tailoring guest experience and service helps operators turn one-time diners into loyal customers.

“New consumer demands are pushing restaurants to find the right balance between hospitality and automation to create the experiences guests crave and return for,” said Joel Montaniel, CEO & Co-Founder at SevenRooms. “Diners want both access and recognition when spending their hard-earned dollars, and restaurants must embrace new strategies – and technologies like AI and automation – to enhance hospitality at every touch point. Whether leveraging platform data to personalize diner experiences or power marketing and retention programs, technology and data serve as a vehicle to execute hospitality that guests remember and return for. When technology is used effectively, it allows operators to focus on building deeper connections and delighting guests, one experience at a time.”

Loyalty is Never One-Size-Fits-All

In the U.S., there was a 21% year-over-year increase in reservations comparing Q1 2023 to Q1 2024 and restaurants are looking to a promising future. Whether operators are focused on opening new locations or revamping their social media marketing efforts, one factor remains the same – establishing personal relationships with diners is the strongest way to build and maintain loyal customers.

Consumers have a strong intent to dine with their favorite brands. If a guest can’t get a reservation at their preferred restaurant, 39% of guests look for a sister restaurant to dine at, and 27% check other sites for the same restaurant.

Cultivating loyalty is critical. Loyalty is not a one-size-fits-all effort and diners have different interests when it comes to the benefits they seek out from loyalty programs. Restaurants need to understand their diner demographics to curate operations and offerings, getting their guests to not only return more often but spend more in the process.

38% of diners who would spend $89-$126 on an average night are looking for exclusive VIP events, while 33% of consumers who dine out 7-8 times per month want VIP access to specialty seating areas. Breaking down generational differences:

  • 72% of Gen Zers care most about free menu items
  • 30% of Millennials care most about VIP access to specialty dining areas
  • 1 in 5 Gen Xers and Baby Boomers want early access to reservations

Genuine, Tailored Marketing is Critical to Success

When it comes to marketing, authenticity and personalization reign supreme for consumers. Guests want to be known by their favorite restaurants, and restaurants want to know and understand their guests. To reach these consumers, and serve up personalized marketing that makes guests want to return, restaurants have to use all the tools in their arsenal – from social media to email and text marketing automation – to create high-touch communications that are both authentic and personal.

79% of restaurant operators spend the majority of their marketing budget on social media. Their top social media goals are to drive bookings or online orders (39%), increase brand awareness (29%) and communicate with their audiences (29%). But not all content is created equal – 39% of operators say that organic posts drive the most bookings to their restaurants. Restaurants that showcase their personality – highlighting their team, food and drinks and atmosphere – will win with consumers as they look for more genuine content from brands.

Most diners like hearing about restaurant promotions and offers via email and text, and aren’t as interested in social media DMs or phone calls, but specific preferences vary by generation. 41% of Gen Zers prefer text marketing, whereas 38% of Millennials and 37% of Gen X prefer email marketing.

With targeted Email Marketing, the data report notes that operators see 23% higher open rates and 28% higher click-to-open rates, generating 2x more revenue per email. Text marketing is fairly new for restaurants, but has huge potential, with an average open rate of 98% and $1.64 average reservation revenue generated per text message on SevenRooms. For one SevenRooms customer, Fabio Viviani Hospitality, it drove $220,000 in revenue and 3,000 new guests in just 4 months.

“The biggest thing that excites me about text messaging is that it’s very hard to ignore. When our phones beep, we are just driven to look at them,” said Harry Kaminski, CMO at Fabio Viviani Hospitality. “It’s easier to ignore an email than it is a text.”

Artificial Intelligence (AI) Comes into Play

Every industry today is using AI and automation in some way to streamline their operations and help staff work more efficiently – and the same is true for the restaurant industry. 70% of operators surveyed said they use artificial intelligence in some way to run their business, including:

  • 35% – Processing reservations
  • 34% – Inventory management
  • 33% – Data analytics
  • 27% – Scheduling
  • 26% – Dynamic pricing

But there is room to grow with AI, with only 16% saying they use it to create marketing collateral and 15% for staff hiring and training. With personalized marketing a large focus for operators in 2024 and beyond, as well as hiring and retaining staff to deliver on high-touch hospitality, operators have an opportunity to use AI more effectively.

“AI elevates our storytelling around data,” said Kelly MacPherson, Chief Supply Chain and Technology Officer at Union Square Hospitality Group. “We have a wealth of data at our fingertips, but this can create analysis paralysis. With AI, we can more efficiently synthesize the data, create stories about what’s happening, why it’s happening, and what we can do about it, and then present these stories to our teams in a digestible format with actionable next steps.”

For more information about SevenRooms and to download the full report, please visit here.

About SevenRooms

SevenRooms is a CRM, marketing and operations platform for growing restaurants in the hospitality industry. From Michelin star gems to local favorites, the all-in-one platform helps restaurants increase sales, delight guests, and keep them coming back, automatically. The full suite of products includes reservations, waitlist and table management, review aggregation, referrals, email marketing, and marketing automation. Founded in 2011 and venture-backed by Amazon, Comcast Ventures and PSG, SevenRooms has more than 10,000 dining, hotel F&B, nightlife and entertainment clients globally, including: Marriott International, MGM Resorts International, Mandarin Oriental Hotel Group, Wynn Resorts, Jumeirah Group, Hard Rock Hotels & Resorts, Wolfgang Puck, Michael Mina, Bloomin’ Brands, Union Square Hospitality Group, Australian Venue Co., Maple & Ash, The Wolseley Hospitality Group, Dishoom, Groot Hospitality, MLSE, Live Nation and Topgolf.

Research Methodology

SevenRooms partnered with Censuswide Research – a third-party, professional research and consulting organization. Total sample size was 1,004 U.S. consumers. Fieldwork was undertaken between March 4-11, 2024. The survey was carried out online. The figures have been weighted and are representative of all U.S. adults (aged 16+).

SevenRooms partnered with Censuswide Research – a third-party, professional research and consulting organization. Total sample size was 251 U.S. operators (hospitality decision-makers). Fieldwork was undertaken between March 4-19, 2024. The survey was carried out online. The figures have been weighted and are representative of U.S. hospitality operators.

SevenRooms provided anonymized internal data representative of U.S.-based restaurants using the SevenRooms platform and surveyed a sample of operators at various restaurant sizes and types across the U.S. from March-May 2024.

Image: kayleigh harrington on Unsplash

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Hospitality Reinvented podcast logo in 2:1 ratio compared to original, produced by KRG Hospitality
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Hospitality Reinvented: A New Series

Hospitality Reinvented: A New Podcast Series

by Doug Radkey

 

Hospitality Reinvented podcast logo in 2:1 ratio compared to original, produced by KRG Hospitality

In my opinion, and likely that of many others, the hospitality industry today is at a crossroads, facing both unprecedented challenges and opportunities.

As we navigate these changes that are upon us, it’s clear that a reset or reinvention is not just desirable, but essential.

To truly understand hospitality and the way forward, let’s take a few steps back.

Hospitality has its roots deeply embedded in ancient civilizations, where the concept was often viewed as a sacred duty and a fundamental aspect of societal norms.

In ancient Greece, for instance, the idea of “xenia” represented a code of hospitality and protection that was honored by both hosts and guests. This tradition emphasized generosity and courtesy toward strangers, reflecting a reciprocal relationship that benefited both parties.

Similarly, in medieval Europe, hospitality was a core tenet of life. Monasteries provided food, shelter, and medical care to travelers and pilgrims. These historical practices established the foundational principles of hospitality that continue to influence the industry today.

The Definition of Hospitality

At its core, as we know it today, hospitality is about providing a welcoming environment, exceptional service, and genuine care for guests. The fundamental principles include warmth, generosity, and attentiveness to the needs of others. These principles are designed to make guests feel valued and comfortable, creating a memorable experience that encourages repeat visits and positive word-of-mouth.

The essence of hospitality lies in anticipating and exceeding guest expectations, ensuring that every interaction is characterized by respect and kindness. This unwavering commitment to guest satisfaction is what distinguishes truly exceptional hospitality services from the rest.

In the modern era, hospitality has evolved to incorporate technological advancements and changing consumer preferences while maintaining its core principles. Today, hospitality encompasses a broader range of services and experiences, from luxurious accommodations and gourmet dining to personalized services and cutting-edge technology.

The rise of digital tools on the hotel side, such as mobile check-ins, AI-powered concierge services, and virtual tours, has transformed how hospitality businesses interact with and serve their guests. Moreover, contemporary hospitality also places a strong emphasis on sustainability and cultural authenticity, with many brands striving to minimize their environmental impact and offer experiences that celebrate local heritage and traditions.

These modern interpretations reflect the industry’s adaptability and commitment to enhancing guest experiences while trying to stay true to the timeless principles of warmth and generosity.

The Purpose of Hospitality

The primary purpose of hospitality is to create memorable experiences that leave a lasting impression on guests. In today’s competitive market, it is no longer sufficient to simply provide a place to stay or a meal to eat.

Hospitality businesses must go above and beyond to craft unique and personalized experiences that guests will remember fondly, and talk about long after their visit.

This involves attention to detail, creativity, and a deep understanding of what delights and surprises a targeted set of guest. From custom welcome amenities and personalized room settings to curated local excursions and immersive cultural activities, the goal is to create a sense of wonder and joy that makes guests feel special and valued.

Another vital purpose of hospitality is building meaningful relationships with guests. Hospitality is fundamentally about human connection and fostering a sense of community. By treating guests as individuals rather than transactions, hospitality businesses can cultivate strong, lasting relationships that encourage repeat visits and brand loyalty.

Genuine, personalized interactions during which staff take the time to understand and cater to each guest’s unique needs and preferences are mandatory. Building relationships also means engaging with guests before, during, and after their stay through various touchpoints and guest journey maps that now many include personalized emails, social media interactions, and follow-up surveys.

Ongoing interactions help to establish a deeper bond with guests, making them feel appreciated and connected to the brand.

Elements of Hospitality We Need to Leave in the Past

One of the key elements that the hospitality industry must leave behind is the reliance on outdated practices. These include rigid check-in and check-out times, excessive paperwork, and a lack of technological integration.

Modern guests expect flexibility, convenience, and efficiency, which cannot be provided through antiquated methods. Embracing digital solutions such as mobile check-ins, contactless payments, and automated booking systems can streamline operations and significantly enhance the guest experience.

We need to move away from outdated practices so hotels and other hospitality businesses can meet the evolving expectations of their clientele, and stay competitive in the market.

Reluctance to Change

Resistance to change is another significant hurdle that the hospitality industry must overcome. The rapid pace of technological advancement and shifting consumer preferences demand that businesses continuously adapt and innovate.

However, a reluctance to embrace new technologies and modern approaches can stifle growth and lead to stagnation. Successful hospitality businesses must foster a culture of innovation and agility. They need to encourage their teams to stay ahead of trends and adopt new practices that enhance guest satisfaction and operational efficiency.

A commitment to embracing change and aligning a forward-thinking mindset will help operators better navigate the challenges of the modern marketplace.

Lack of Sustainability

Further, the hospitality industry has long been criticized for its unsustainable practices, including excessive water and energy consumption, waste generation, and reliance on single-use plastics. As environmental consciousness grows among consumers, it is imperative for hospitality businesses to adopt more sustainable practices. This includes implementing energy-efficient systems, reducing water usage, minimizing waste, and sourcing eco-friendly products.

Many bars, restaurants, and hotels are now pursuing green certifications and adopting practices such as using solar energy, installing low-flow fixtures, and offering recycling programs. Prioritizing sustainability means hospitality businesses can not only reduce their environmental footprint but also attract eco-conscious guests.

Toxicity

Lastly, toxic workplaces that fail to take care of their team members are another critical issue that needs to be addressed.

The hospitality industry is notorious for high employee turnover. Unfortunately, we’ve become known for poor working conditions, lack of career advancement opportunities, and inadequate compensation. Each of these go against the essence of hospitality.

How we treat our guests is how we should treat our very own people. Creating a positive work environment that prioritizes staff well-being, professional development, and fair treatment is essential for retaining talent and ensuring high-quality service. This includes providing comprehensive training programs, offering competitive salaries and benefits, and fostering a supportive, fun, and inclusive culture.

Hospitality businesses can improve job satisfaction, reduce turnover, and ultimately enhance the overall guest experience by investing in their people.

Where the Hospitality Industry is Going

There’s no secret, hospitality is embracing technology at warp speed. Operators are now inundated with solutions promising to enhance operational efficiency, plus staff and guest experiences.

Innovations such as artificial intelligence (AI) and the Internet of Things (IoT) are transforming how hotels and other hospitality businesses operate.

AI-driven chatbots and virtual assistants are improving guest services by providing instant responses to guest inquiries, along with personalized recommendations. IoT devices are enabling smart room controls, allowing guests to adjust lighting, temperature, and entertainment options with ease. Blockchain technology is enhancing security and transparency in transactions and loyalty programs.

Leveraging these advanced technologies sets the hospitality industry down the path toward providing more seamless, personalized, and engaging experiences for guests.

Focus on the Right KPIs

As the industry evolves, so do the metrics used to measure success. Traditional key performance indicators (KPIs) such as occupancy rates and average daily rates are being supplemented with new, more holistic KPIs.

Guest satisfaction scores, social media engagement, and sustainability metrics are becoming increasingly important. For example, Net Promoter Scores (NPS) provide insights into guest loyalty, and the likelihood to recommend the hotel to others. Social media metrics, including likes, shares, and reviews, reflect the hotel’s online reputation and guest engagement.

Additionally, sustainability metrics such as energy consumption per guest and waste reduction rates are being tracked to ensure that the hotel is meeting its environmental goals.

These new KPIs offer a more comprehensive view of a hotel’s performance, encompassing guest experiences, brand reputation, and environmental impact.

The Guest and Staff Experience

The future of hospitality is also about reimagining staff and guest experiences to create more meaningful and memorable interactions.

For staff, this means providing ongoing training and professional development opportunities. This approach keeps the team updated with the latest industry trends and technologies. Despite the technology, operators need to empower team members. A great leader ensures their teams are receiving valuable training on the skills and knowledge they need to excel. Doing so improves service quality, and boosts morale and retention rates.

On the guest side, new programming and experiences are being introduced to cater to diverse interests and preferences. By focusing on innovative staff and guest programming, the hospitality industry is creating environments that are enriching, engaging, and memorable.

Spirit of Hospitality

With all that said, amidst all the technological advancements and new metrics, it is essential to bring back the true essence of hospitality and what it means to be hospitable. We have to get back to the “why” of what we do in this industry, and remind ourselves once again about the true definition of hospitality.

At its core, hospitality is about genuine care, warmth, and making guests feel welcome and valued. This involves cultivating a culture of empathy and service excellence in which every guest interaction is an opportunity to create a positive impact.

Personalized service, attention to detail, and going the extra mile are the hallmarks of true hospitality. It’s about creating an atmosphere where guests feel at home, whether they are eating at a restaurant, having a drink at the bar, or staying for a night or an extended period.

Blending modern conveniences with the timeless principles of hospitality ensures that the heart and soul of hospitality remain intact, even as it continues to evolve and reinvent itself.

Introducing Hospitality Reinvented Podcast Series

As the hospitality industry continues to evolve, staying ahead of trends and innovations is crucial for success. That’s why I am excited to announce the launch of the Hospitality Reinvented podcast series hosted with yours truly, Doug Radkey.

This podcast, set to go live this month, aims to explore and discuss the latest developments in the hospitality industry. I’ll provide insights and strategies to help operators and their businesses thrive in their dynamic and competitive market.

The Hospitality Reinvented podcast will delve into a variety of topics, from the integration of modern technology and new KPIs to reimagining staff and guest experiences. Each episode will blend timeless principles of hospitality with modern innovations and strategic playbooks, offering listeners practical advice and inspiration to create a guest-centric, sustainable, and forward-thinking industry.

The podcast will serve as a valuable resource for hospitality professionals looking to reinvent their operations and stay ahead of the curve. Join us on this journey as we explore how to blend tradition with innovation to shape the future of hospitality.

Tune in to Hospitality Reinvented each week and discover how you too can transform your business and create lasting, memorable guest experiences.

Join us on this journey by subscribing to the Hospitality Reinvented podcast, following us on social media, and staying engaged with the latest insights and trends here at KRGHospitality.com.

Image: KRG Hospitality

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