Hotel Equities’ Bill Stachler takes a deep dive into a trio of proactive, real-time management tools that maximize through-put.
Revenue managers have unprecedented access to margin-building data. From macroeconomic forecasts to micro-market analyses, they can tap into metrics to direct their short- and long-term strategies. But, according to Bill Stachler, Hotel Equities’ (HE’s) vice president of revenue optimization, the real need is for interpretation of the everchanging data to customize peak performance planning for each hotel.
“There’s more and more granular data available to everyone,” said Stachler, who oversees revenue management strategy for approximately 300 hotels representing 47 brands in 48 states. “Ultimately, we're still going to have to sift through that to determine what moves and shakes top performance at each hotel. After all the cycles and technological breakthroughs, the goal hasn't changed. It's how do we maximize revenues every day, and how do we fully leverage the individual property’s potential?”
For Stachler, that process focuses on revenue drivers in three key areas:
• Dynamic pricing strategies
• Segmentation and targeting
• Data-driven decision-making
Unlock pricing potential
“Dynamic pricing is about catching the demand curve. The goal is to allow pricing to be maximized when you can and remain adaptive during high and low demand cycles. It’s about setting the right price at the right time to maximize profits every day,” said Stachler.
Segmentation strategies today focus on the ability to put that flexibility into play, test it, modify it –not just wash, rinse, repeat.”
Bill Stachler
He credited advances by major hotel brands (Marriott flags fly over 38% of HE’s portfolio; Hilton’s account for 35% and IHG’s for 14%) in developing systems that provide dynamic calculations and provide the forward-looking data we need to make the best possible pricing decisions. However, he added that, “It’s how we interact with and leverage those systems to ultimately benefit the owners.”
Striving to achieve the “perfect mix” requires fresh eyes on weighing fundamentals such as historic trends. “Now, it’s not only about what we see happening when comparing a certain month or a certain season; it can be a look at what’s happening from one day to the next in your market.”
Upgrade ROI of segmentation and targeting
“Although current systems can provide analytics and trends to set pricing, the systems don’t understand what we know – new accounts coming into the market, new supply, or things that may affect overall demand such as an account that left the market,” Stachler pointed out.
Effective management of segmentation and targeting starts with determining a retail price point based on brand, position, and base business. “Because of market- and demand-driven changes, we've recently been able to go back to accounts to discuss pricing that had not occurred during the Covid years,” he said.
That means analyzing impact beyond just the numbers. “Day of the week and length of stay allow us to dynamically price accounts that benefit each hotel. So, a certain account that may generate business at a slightly lower rate on off-peak nights might be more valuable than an account that’s paying $30 more but only comes in on our peak night.”
He also recommended ongoing testing and measurement of changes. “Pricing on the retail side changes quickly; it floats like the weather. It’s vital to make sure that discounts or special offers keep that price point relevant all the time,” he said. “There is another element of context. How much group business do we really need? When do we need it? What days do we need it? What is the correct price point and where’s the segmentation within group that can also drive pricing? The answers to those questions all go into making determinations on the overall pricing strategy by each one of those segments.”
Bill Stachler, Hotel Equities
He advised integrating increased flexibility into any segmentation strategy. “One of the mistakes that we all make is we determine what we think segmentation looks like. But, over the last couple of years, we’ve seen the need to be more nimble. Segmentation strategies today focus on the ability to put that flexibility into play, test it, modify it –not just wash, rinse, repeat.”
Declutter data to make smarter decisions
Managing the mountain of available data can overload most revenue management teams. Like his counterparts across all industries, Stachler prioritizes measurement tools. But, he offered some tips on context for evaluating the actual impact of the numbers on the bottom line of the business now and going forward.
“When you talk about individual groups and individual accounts, you have to measure the entire value of each piece of business ,” he said. “And, don’t forget that there is the cost to capture that business and to service it. Analytics give us the measurements we need to bring all those factors into view so that we can determine the best possible rate and occupancy we can achieve.”
Artificial Intelligence (AI) already exists as the big brands are using it to suggest pricing models in their systems, Stachler said. “We take the data the systems supply us and incorporate it to achieving our goals. At HE, we talk a lot about street corner to street corner, so we blend data and local knowledge to make sure we know what’s going on in our local market before we make revenue management pricing decisions.”
He dismissed the fear factors surrounding the incursion of AI in management. “Everybody has some version of AI, so optimizing performance is still going to come down to a skilled hotel team. We talk about being market disruptors, but if most hotels have similar levels of data, it’s up to the team to determine what else we can do to get an edge.”
Stachler predicted there will be more refinements in algorithms, whether for performance reporting, third-party shopping tools or consumer websites.
“We’re at a point where we can combine the best of the data side and the expertise of human intelligence to develop strategies that get us closer to that goal of maximizing the intra-day potential at every hotel,” he said.
Mary Scoviak is custom and design content editor for Hotel Investment Today and The BHN Group.
The views and opinions expressed in this content do not necessarily reflect the opinions of Hotel Investment Today or Northstar Travel Group and its affiliated companies.