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Lead Technology – Best at e-Commerce
REVIEW
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8.1% systemwide RevPAR growth 2 Why hope is not a strategy 2 What’s interesting in the economy? 2 Budget-based v. Market-based benchmarking 3 How to think about RevPak 3 Field Marketing: how it impacts your business 4 Reservations: expect outstanding call center performance 5 Reputation management and pricing 5 Next: new opportunities soon to come with RevPak 6 What they are saying 6
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CONTENTS Page
Lead Technology Best at e-Commerce
REVIEW
Issue 1 | March 2, 2015
Lead Technology – Best at e-Commerce
REVIEW
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The brand’s systemwide RevPAR growth exceeded 8% in the fourth quarter (4Q14) as a result of the RevPak Guest Management System activation and our strong Direct Sales e!orts. The impact of Field Marketing, in particular, in improving our online storefronts and execution of our multi-channel campaign, can be evidenced by our approximate 16% growth in e-commerce bookings. That’s $2MM worth of incremental rooms revenue from new customers to recognize and enroll in Hello Rewards. We will rinse and repeat the key successes of 4Q14 throughout 2015 and beyond, serving notice to the competition that their business will soon be ours. By comparison, Hyatt was up +1.9%, Marriott was up +6.1% and Hilton was up +6.6%, IHG was up +7.4%. These brands face more macro-economic and geopolitical uncertainties than we face today. Nonetheless, this is a great example of how RevPak is equipping our brands to play in the headroom of RevPAR opportunities in our markets. “Always do your best. What you
plant now, you will harvest later”. Og Mandino
8.1% Systemwide RevPAR Growth RevPak GMS System Activity Update (cont’d)
March 2, 2015
The two biggest challenges hotels face today are the volume of data and the speed and relentless pace of change in the revenue strategy and distribution world. What is true today is not true tomorrow or yesterday. RLHC RevPak is the quintessential strategy tool for taming this two headed beast. The Duetto Revenue Strategy System sorts through the massive amounts of real-time market demand data, web regrets and denials, competitive shopping data as well as hotel reservation pace data and presents this amalgamation of data in a fashion that can be quickly absorbed and responded to. RevPak provides for more accurate strategy decision making that dramatically increases your ability to grow market share and contribution. RevPak does not give me hope, it gives me vision.
Why Hope is not a Strategy
WHAT’S
INTERESTING IN THE ECONOMY?
Record Occupancies through 2016 By year-end 2014, the 55 major U.S. markets covered by the PKF-HR Hotel Horizons forecast reports are projected to achieve an all-time record high occupancy level. PKF-HR is forecasting an aggregate occupancy of 70.4 percent in 2014 for these major markets, eclipsing the previous peak level of 69.0 percent reported by STR in 1996. For comparison purposes, PKF-HR is forecasting that the overall U.S. lodging market will surpass its all-time record occupancy level in 2015. Record performance for the major markets is expected to persist through 2016. PKF-HR is forecasting the 55 Horizons markets will achieve aggregate occupancy levels of 70.8 percent in 2015 and 71.4 percent in 2016. Because of these lofty occupancy levels, hotels in the major markets will gain pricing power. Annual increases in average daily rate for this group are projected to be more than twice the long-run average annual ADR growth rate in both 2014 and 2015. It should also be noted that ADR increases in the major markets will exceed the national average ADR growth rate in 2014 and 2015. With Duetto Revenue Strategy System always on the lookout for opportunities to maximize revenues moment-by-moment, now is the right time to let go of legacy thinking and let Duetto do what it does best…grow market share!
Lead Technology – Best at e-Commerce
REVIEW
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The RevPak Guest Management System has no equivalent in our industry. It is our technology North Star, guiding RLHC brands to market share leadership positions. And, it is just getting revved up. It begins with the very definition of Revenue Optimization to determine the building blocks of this first of its kind platform: To sell the right product, to the right customer, in the right channel, at the right time, for the right price. Cunningly, the key components within RevPak, together they become the very answer to this declared purpose: OPERA Property Management System: To sell the right product, Serenata NetHotel CRM: To the right customer, Windsurfer CRS: In the right channel, Duetto RMS: At the right time and for the right price. RevPak further surrounds each of these business objectives with additional support resources and systems, such as Compass SFA (sales force automation) and Field Marketing driving our digital storefront. HeBS Digital, Customer Direct Central Reservations O#ce, and ReviewPro Reputation Management, to name a few. These systems and others give our owners and property leaders the best opportunity to win the day, every day.
How to Think about RevPak
RevPak GMS System Activity Update (cont’d)
March 2, 2015
The RLHC marketing team has begun mapping out a new approach in setting performance benchmarks for day-by-day strategy and tactics. This new approach focuses less on a hotel’s budget and more on the potential demand of the STR comp set for each property. This boils down the thinking to what must be done for a hotel to hit their budget, and more importantly, outpace market share gains? Below is a recent example of a 100-room hotel setting their strategy for Tuesday, March 3, 2015: This hotel has 50 rooms as its Budgeted Paid Rooms for Sunday, March 1. Why 50 rooms? Well, they sold 49 rooms last year and 47 rooms two years ago. STR data for the 4-weeks ending February 7, 2015 indicate that the comp set has been running 65% for the last four Tuesdays. Additionally, the same Tuesday in 2014 (March 4), the comp set ran 62% occupancy. The di!erence between the Budgeted Paid Rooms and Potential is 12 rooms. The potential for potential is all about the General Manager who build his Revenue Strategy plans and actions around getting to 62 Paid Rooms and not being satisfied with 50 Paid Rooms, just because it was budgeted for. RevPak is strong enough to take on this Potential if we mobilize all systems and support resources around it. More to come on this, but in the meantime, take some time and compare your budgeted day-by-days to what your day-of STR is telling you.
BUDGET-BASED V. MARKET-BASED BENCHMARKING The RLHC marketing team has begun mapping out a new approach in setting performance benchmarks for day-by-day strategy and tactics. This new approach focuses less on a hotel’s budget and more on the potential demand of the STR comp set for each property. This boils down the thinking to what must be done for a hotel to hit their budget, and more importantly, outpace market share gains? Below is an example of a 100-room hotel setting their strategy for Tuesday, March 3, 2015: This hotel has 50 rooms as its Budgeted Paid Rooms for Sunday, March 1. Why 50 rooms? Well, they sold 49 rooms last year and 47 rooms two years ago. STR data for the 4-weeks ending February 7, 2015 indicate that the comp set has been running 65% for the last four Tuesdays. Additionally, the same Tuesday in 2014 (March 4), the comp set ran 62% occupancy. The di!erence between the Budgeted Paid Rooms and Potential is 12 rooms. The potential for potential is all about the General Manager who builds his Revenue Strategy plans and actions around getting to 62 Paid Rooms and not being satisfied with 50 Paid Rooms, just because it was budgeted for. RevPak is strong enough to take on this Potential if we mobilize all systems and support resources around it. More to come on this, but in the meantime, take some time and compare your budgeted day-by-days to what your daySTR is telling you.
Lead Technology – Best at e-Commerce
REVIEW
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HOW FIELD MARKETING IMPACTS YOUR BUSINESS
In the last several months, we have been able to use the RevPak tools to gain incremental share in our market. Here is an example from the Red Lion Hotel at the Park from Joe Tidwell, Director of Revenue Strategy: “Through Field Marketing and the tools on the Redlion.com website, we have been able to work with large events such as the Professional Bull Riders. We used promotion tiles on Red Lion.com and made links bookable through the event’s website. This allowed us to drive tra#c, bookings and organic search results.” “Through Field Marketing and the tools on the Redlion.com website, we have been able to work with large events such as the Professional Bull Riders. We used promotion tiles on Red Lion.com and made links bookable through the event’s website. This allowed us to drive tra!c, bookings and organic search results.”
March 2, 2015
Red Lion Hotel Kalispell Field Marketing allows us not only the opportunity to create campaign initiatives for our hotel’s long-term timelines, but now we have the opportunities to accommodate owner and management requests for campaigns that can be implemented quickly. One such tool is utilizing cross-promotion via the world’s largest travel site, TripAdvisor. Through TripAdvisor’s Display Campaigns we can highlight specific property o!ers and promotions, provide individual property pages which highlight destination content for guests and target customer segments. O!ering this initiative allows properties the opportunity to engage a large audience they did not have access to before, thereby driving tra#c to their websites and increasing brand awareness expeditiously. In January 2015, Tripadvisor.com display campaigns saw revenues more than double from December 2014 at $52,388 with an increase in Return on ad spend (ROAS) of 498%.
Red Lion Hotel Portland Airport With the online tools available for field marketing we can execute a multitude of campaigns as well as maintain a constant online presence with special o!ers and packages through the Redlion.com content management system (CMS). For example, we have a constant campaign running for Red Lion Hotel Portland Airport, their Park, Stay & Fly package. With the promotion tools available in the CMS and CRM, we can execute an email campaign geared toward guests within a certain geographical area of Portland with integrated links to the booking engine to drive package re venue. Additional merchandising tools that we can use are promo tiles and home page promotion slides. The redlion.com/Portland-airport website has a permanent Park, Stay & Fly promo tile as well as the home page navigation tab that when clicked, takes guests to the specific PSF page and displays the package options. (See screen shots below). The property has seen a significant increase package business using this integrated messaging approach through email marketing and website merchandising content. Since this strategy was activated the hotel has seen a 24% increase in website bookings for the Park, Stay & Fly package.
Lead Technology – Best at e-Commerce
REVIEW
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RESERVATIONS: EXPECT OUTSTANDING CALL CENTER PERFORMANCE When it comes to taking a voice reservation, it’s all about conversion. Industry benchmarks for voice reservation conversion is between 40% and 50%. Within RevPak, CustomerDirect achieved 71% in December and 70% for January for our brand. These are epic results that will only continue with Telephony optimization. Telephony optimization will allow us to closely monitor your hotel’s individual conversion performance to optimize where we need to and leverage portfolio best practices. Additionally, our CustomerDirect CRO is averaging a $15 rate premium for unmanaged Corporate and Leisure travel. This analysis removes all managed segments, such as Group, Preferred Corporate and Perm and compares the average rates booked at Non-Qualified Retail like BAR and RNR, Qualified Discounts like AAA and AARP, and all Promos between our CustomerDirect CRO and Property Direct. Conclusion: if you think your hotel could use a higher conversion and a $15 rate premium, don't hesitate to transfer calls to our CustomerDirect CRO.
REPUTATION MANAGEMENT & PRICING Cornell University and ReviewPro partnered in a study that showed that a 1-point increase in your hotel’s 100-point ReviewPro Global Review Index™ (GRI) leads to a 0.89% increase in price (ADR), a 0.54% increase in occupancy and a 1.42% increase in Revenue per Available Room (RevPAR). The study verifies that the impact is across all distribution channels: online and o$ine. “What was remarkable about the study is that positive online reputation doesn’t merely provide higher pricing power for online sales. It is correlated to higher group booking rates and corporate negotiated rates in addition to reservations made over the phone.” Chris Anderson, Professor, School of Hotel Administration, Cornell University The findings are based on analysis of more than 31,000 monthly observations over 2 ½ years on midscale, upscale, and luxury hotels in 11 major metropolitan markets in the North America and Europe: London, Milan, Rome, Madrid, Berlin, Prague, Chicago, Los Angeles, New York, San Francisco and Miami. What this study suggests is that hotels should spend less time worried about their pricing (let Duetto do that) and more time on improving their online reputation metrics. What is your hotel’s ReviewPro GRI score?
March 2, 2015
Lead Technology – Best at e-Commerce
REVIEW
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WHAT THEY ARE
SAYING
Being the best at e-commerce is not a regional aim, but a global one. We need to provide the high volume of international inbound tourists the opportunity to book Red Lion on our web and mobile direct networks in the native tongue. We are working on activating German, French, Spanish and Chinese with a new member of RevPak, Sovee translation services, to provide translation options to our guests. Visit www.sovee.com to learn more. Small Meetings are short-term demand opportunity that we intend to create a service delivery approach for. We believe that by leveraging our existing RevPak partnerships with CustomerDirect, HeBS and Compass, we can provide a leading solution for our brand to win in the small meetings market. Reservation fulfillment for accounts requiring direct billing are a key area of opportunity. Properties with a high mix of sales contribution from group and preferred corporate find their front o#ce and sales teams burdened with servicing reservation work flow responsibilities. These di#culties arise because their billing has to be setup locally and booked directly through PMS in order to setup routing. If we were to create an outlet for these accounts to book on Redlion.com or via the GDS, we could make a shift that would allow us to setup links to their direct bill and we could grow contribution.
March 2, 2015
“During strategy calls we can discuss the data within Duetto knowing the information provided is accurate and current. Making rate changes can now happen with a few key strokes and a click of a button while still on the strategy call. This function allows the General Manager to see the changes being made and the strategy being rolled out.” Donya Alward, Director of Revenue Strategy – Puget Sound “Rate Strategy is not just about what rate we want to sell anymore – it has transitioned to what rate is competitive in the market right now. This is especially is important on low demand days.” Cari Kalapis, Director of Revenue Strategy – Revenue Management for Hire “With the e#ciencies given by the new system you can research and implement a new strategy in less time than what it takes to update a months’ worth of rates in the previous systems.” Cassie Wynne, Director of Revenue Strategy – Tri-Cities “Duetto gives the end user the ability to quickly analyze daily trends, then quickly implement pricing changes with the click of a button from any computer or mobile device. E#cient price changes allow us to remain competitive and gaining more bookings that in turn drive OTA positioning, which provides more exposure that directly correlates with more bookers, which inevitably gains market share. Duetto is giving us an edge in the game.” Stephenie Torres, Director of Revenue Strategy - Anaheim
Next: New Opportunities that are Soon to Come with RevPak
Lead Technology – Best at e-Commerce
REVIEW
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If you want more information about RevPAK or to discuss further ways to optimize your deployment, please contact any of the following owners:
Serenata NetHotel CRM Owner: Allegra Medina [email protected]
Profit Sword BI Owner: Aaron Howard [email protected]
Duetto Revenue Strategy System Owner: Paul Chappelle [email protected]
WindsurferCRS Owner: Kristi Garrahan [email protected]
Compass SFA Owner: Shannon Gri#ths shannon.gri#[email protected]
CustomerDirect Owner: Jason Thielbahr [email protected]
HeBS Digital and Field Marketing Owner: Jeremy Scott [email protected]