Rainmaker was represented by Patrick Andres and Joey Kang at the 2016 National University of Singapore (NUS) "Future of Hotel Revenue Management Roundtable Discussion" held at their Singapore campus. The event was hosted by Professor Sherri Kimes. Sherri is a Visiting Professor of Decision Sciences at NUS, and a Professor of Operations Management at Cornell University.
More than 60 revenue management students from the NUS Business School participated in the event, which was co-sponsored by Rainmaker.
Patrick and Joey were actively engaged in the conversation with industry participants that included regional directors and vice-presidents from Fairmont, Shangri-La, Four Seasons, Hilton, InterContinental, and the Marina Bay Sands. Google and Expedia also participated.
Below are highlights of the discussion between Patrick and the other roundtable participants in three major areas: privacy and data; customer insights; and total asset maximization.
Privacy and Data
The topic of data collection was passionately discussed among the attendees. Citing the example of Disney’s Magic Wristbands, which are used to track guest purchasing and park behavior, Professor Kimes pointed to the mutual benefit received by both parties. Patrick highlighted that while consumers see value (eg, discounts) in providing their information, there was a self-policing mechanism in place that prevented use of the data against the consumer (eg, price discrimination). Professor Jochen Wirtz of NUS shared this view, emphasizing the backlash from consumers that would occur should their data be used in ways other than to further the customer experience.
Patrick also noted that the younger generation seemed to value many other benefits (like free WiFi) over the privacy of their data.
Patrick emphasized that focusing only on maximizing room rate is becoming less relevant, especially for integrated businesses resorts and hotels with the opportunity to sell ancillary services. Getting the right customers is now much more important than getting the right rates.
He also raised the point that hotels do not have customer visibility to the extent that gaming has. This leads to the issue of transparency of guest information, and how a hotel can get accurate data. As a guest books a room in the hotel, the hotel needs to choose who to accept or reject in order to maximize revenue with limited capacity. Hotels would clearly prefer a guest that spends more on other ancillary services than a guest who only stays for the night. Revenue managers will need to meet the challenge of how to predict which guests will spend more.
Revenue Management To Total Asset Maximization
This discussion highlighted how hotels can differentiate themselves from competitors by focusing on personalization. Patrick highlighted this view by adding that “it is more important to get the right customers than to get the right room rates.” Often, hotel management becomes too focused on their pricing strategy; as a result, they ignore the importance of guests’ satisfaction and additional revenue that could be generated from ancillary services.
Looking beyond room pricing, hotel management should consider amenities that could help to generate higher revenues, such as spa services. Hotel management needs to identify what their customers want, and make it easy and convenient for them to gain access to those services.
To dive into more topics from the NUS Revenue Management Roundtable, check out the additional topics from the NUS blog:
Rainmaker has always emphasized the importance of the total value of a guest when it comes to revenue management. Switching focus onto the people checking in and their full spending potential, rather than a singular focus on the rate they are paying, was one of the key takeaways from this roundtable. We thank the National University of Singapore for organizing and inviting the Rainmaker team to this wonderful event. Look forward to the next one!