TRENDING
Group
DYNAMICS
OTAs aren ’ t the only intermediaries having a significant impact on how business gets booked at hotels and the rising costs associated with disrupted distribution . According to a recent study by Kalibri Labs , in 2017 , 43 % of group business was intermediated ( versus booked direct by hotel sales staff ); that ’ s projected to increase to 60 % by 2022 . Commissions for intermediated group business cost hotel owners from
15 % to 35 % and could double over the next five years . Some brands , like Hilton and Marriott International , recently announced lower group commission rates . Chad Crandell , CEO of U . S . -based asset management and owner advisory company CHMWarnick , shares insight on strategies owners can consider when holding operators to task to deliver meaningful profits :
• Strategically evaluate sales and marketing deployment and departmental expense structures to ensure that resources are aligned with goals and
changes in how customers book
• Examine the optimal mix and source of business to understand net costs and profit contribution
• Find opportunities to differentiate group offerings in a market that increasingly has become price-driven through the RFP process
• Seek ways to lower related expenses , such as policies on group use of credit cards like offering incentives to pay cash ; consider loyalty-related costs ; and review outsourcing costs , such as AV .
BACK-OF-HOUSE smarts
Beyond guest room chatbots , artificial intelligence can help a hotel ’ s back of house by automating tasks in departments from housekeeping ( smart devices can let housekeepers know what needs to be replaced or reset ) to revenue management ( software can crunch through data , both current and historic , to set a room rate ) and even reservations ( booking engines will help a guest determine which room to stay in and which price they would most likely pay .)
But the question remains : Is all this absolutely necessary ? Ben Rafter , chief executive officer of OLS Hotels & Resorts , a Los Angeles-based hotel management company , says artificial intelligence might be more pertinent for hotels in five or 10 years — but for right now , it ’ s just nice to have .
“ If we can use technology to know what a guest wants before she knows she wants it , then we ’ ve succeeded ,” Rafter says . Until then , these things are just experimentation with new technology that really don ’ t provide anything other than an alternative vehicle to doing something for a guest . Usually with more guest dissatisfaction .”
Rafter says his company is testing an Alexa-like device at Hotel Renew in Honolulu , Hawaii , but instead of the device spitting out answers or recommendations that anyone can Google on a phone , this device will offer up custom content developed by either the hotel ’ s employees or local experts .
“ All of our investments should be geared towards better personalization and tools that can deliver it ,” he says .
For other hoteliers wondering if they should make the leap into AI , Rafter says think again . “ If you want to invest in one thing , forget AI . Invest in plumbing ,” he says , referring to the hotel ’ s Wi-Fi infrastructure — preferably with large amounts of bandwidth .
— Juliana Shallcross
12 hotelsmag . com May 2018