Hotels Need to Focus on Talent and Tech in 2024
Revenue leadership at Frasers Hospitality Pte Ltd believes that technology spend will increase in 2024, with tech infrastructure, cybersecurity, integration, and AI solutions being at the top of the priority list, according to Sheran Loh, Vice President, Revenue Management (Corporate), Frasers Hospitality. She also predicts talent continuity will remain one of the key challenges for the year ahead.
World-leading collection of hotel residences and serviced apartments, Frasers Hospitality Pte Ltd, has properties in locations across the world, including Australasia, Europe, Africa, and the Middle East. It currently has 55 properties utilizing Duetto and has been a customer since 2019.
Challenges And Changes In 2024
Heading into 2024, Loh believes there are three key revenue management trends to look out for. She lists them as:
Revenue management becoming a commercial strategy. Future commercial leaders will be capital allocators who understand the business and make investments to influence the business mix.
Centralization of revenue management functions. This will help teams to leverage cross-border economies, talent, and technology to provide maximum returns.
Dynamic optimization and monitoring. No longer should RMs be looking at price optimization three times a day. The industry needs to move to live optimization and real-time alerts.
Considering the challenge of maintaining talent continuity, Loh says: “Compensation has been on the rise but it is vital to develop talent across all functions to the next level and groom the next batch of budding talents.”
She also believes that there will be a significant change to hotel tech spending this year. She explains: “There will be a focus for enterprises and hotel management companies to adopt a build-over-buy solution. The reason for this is to have an integrated digital twin of the business and be able to make strategic decisions to shape the business. Technology spend will increase in technology infrastructure, cybersecurity, integration, and AI solutions.”
To encourage further digitalization of the industry, Loh believes that a seamless end-to-end solution for the customer is essential. “It is vital for technology partners to sit in the consumer lens to assess that the problem is sizable enough for the leadership to act on it,” she says. “More ROI (benefit vs cost) analysis pre- and post-implementation, and use cases for leadership buy-in are also important,” she adds.
Automated Processes In Revenue Management
When asked how important automated processes in revenue management, such as for pricing, restrictions, or strategy, will be for Frasers Hospitality in 2024, Loh answers: “The top priority will be for the RMS algorithm to do better than a human for pricing changes and scale it across multiple properties. However, the art of shaping business mix, negotiating managed segments (corporate, wholesale, long stay), and navigating bureaucracy remain in the revenue manager’s hands.”
Managing Contracted Business and Optimizing Business Mix
Loh explains that it will be vital for commercial heads to identify and close opportunities between their transient FIT segment and their managed segments.
She adds that, for her, when it comes to optimizing the company’s business mix, the focus this year will be:
Transient FIT – To have control over parity, drive digital marketing budget for top-performing properties and reduce distribution costs.
Managed Segments – To renegotiate corporate rates based on gaps (i.e. room type consumption, club access privileges) and wholesalers (dynamic discount level in accordance to production).
Long Stay – Cost management and balance over transient segment mix.
Loh also adds that in 2024 she will be investing her channel management efforts in:
B2B – Establishing strategic partnerships with wholesalers and reducing static rates to non-productive offline travel agents.
B2C – Investing in loyalty programs and customizing pricing to encourage book direct initiatives.
She will also be increasing digital marketing to increase brand presence. “Parity is essential for commercial negotiation and business success,” she says.
Discover what other industry experts believe are the revenue trends to look out for in 2024. Download our latest special report ‘Trends & Predictions to Advance Your Hotel Revenue Strategy in 2024’: https://www.duettocloud.com/special-reports/advance-your-revenue-strategy-in-2024
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This article originally appeared on the Duetto blog here and is reproduced with their permission.
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