Commercial strategy key to biz growth
The hotel industry is once again in a state of flux; the pandemic changed the way hotels operate but we are currently in a second evolutionary phase in which the convergence of technology and strong commercial leadership is proving to be an operational imperative for hotels to ensure profitability over the long-term, shares Noelani Schroy, Vice President - Commercial Strategies, LodgIQ.
What are the key areas to focus on in order to bring better revenue to the property?
An important first step in this new operational evolution is the implementation of a commercial leader to oversee all the internal departments responsible for revenue generation. In the past few years, commercial teams have started being established in big, branded properties, but today, it is important for all properties – from a 50-room independent property to a 1000-room resort – to implement a commercial leadership role or department to be successful going forward. And, even if you have a small 10-room BnB, changing to a more commercially focused mindset will do nothing but good for your operational efficiency and your bottom line.
Is it necessary for all properties to have a commercial leader?
A hotel’s success relies heavily on the ability of its revenue management, marketing, and sales departments to seamlessly collaborate towards shared goals, breaking down the siloes that traditionally exist between these operational departments. This is made possible through the implementation of a robust commercial leadership team, which will oversee the three departments, keeping them working towards common business goals through collaborative action. This strategic alignment ensures that all efforts are synchronized, maximizing the impact of the hotel’s commercial initiatives.
Strong leadership fosters a culture of collaboration, innovation, and adaptability, which is hugely important in our ever-changing hospitality industry, but leadership alone will not give hoteliers the edge that they need to stay ahead of the curve. Informed interdepartmental decisionmaking, based on easy-tounderstand un-siloed data, is the cornerstone of successful commercial strategies, making a commercial strategy platform the catalyst for a property’s strategic alignment.
One important caveat: Many solutions call themselves a commercial strategy platform but they don’t actually perform functionality beyond that of a data well, which will unsilo your data but will not have a real impact on your property’s bottom line. The real ROI of a commercial strategy platform is the strategic insight that it offers, which enables each revenue generating department to take proactive, clear, forwardthinking actions.
What is a commercial strategy platform?
A commercial strategy platform is a centralized hub that provides an aggregated and real-time view of critical metrics, which eliminates the traditional data silos that have existed between a property’s operational departments. Using a shared pool of information across the revenue management, sales and marketing departments allows for a more holistic understanding of the market, guest behaviors, and the overall performance of the hotel, which is beneficial for all three departments’ deliverables and responsibilities. From adjusting room rates based on demand and consumers’ willingness to pay, refining marketing campaigns to target specific demographics, or optimizing sales efforts for peak periods, a commercial strategy platform provides a single source of real-time data upon which all strategic decisions should be made, ensuring more effective, data-based decision-making.
Commercial strategy platforms provide hoteliers with the property data that traditional business intelligence solutions offer, as well as real-time demand and market data, in addition to providing valuable revenue management functionality, such as rate optimization, group rate optimization and forecasting functionality. But the best part is that commercial strategy platforms give your revenue management, sales and marketing teams access to strategic recommendations on how
A hotel’s success relies on the ability of its revenue management, marketing, and sales departments to seamlessly collaborate towards shared goals
to best accomplish their departmental business goals.
By providing all the data that all three departments could need, from a centralized solution, it empowers the departments to act independently, without the need to request information from other departments to facilitate timely decision-making.