As an ex revenue manager from a sales and marketing background, I was considered to be a weird mix early in my career. It was always thought of as strange to mix sales with controls and people always referred to the move from sales to revenue as “going to the dark side”, even the revenue managers.
My obsession with benchmarking and beating the market, driving market penetration and compulsively monitoring competitor strategies came from my ‘salesy’, need to win instinct; meanwhile my strategic attention to detail side, the focus on the market bit, was pure revenue management. You couldn’t possibly have both skill sets? At least that’s what I was told countless times in my early career. Pushing to be a general manager in my day with my background? Not a hope – only if you know F&B, but that’s a different story.
Don’t worry, this isn’t going to be a ‘smash the glass ceiling’ style article, but it is an opportunity to reflect on the radical shift in our industry, and the changing personal values we now require, to thrive.
My generation of middle management in hotels was the one that saw the shift from occupancy and average rate into REVPAR (revenue per available room), and then we had TREVPAR (total revenue per available room); a godsend when you revenue manage a leisure club and golf course, never mind F&B. Latterly, when I did become a GM, my attention was focussed on GOPPAR (gross operating profit per available room), then departmental profit metrics, payroll %, overheads and expenses.
The detail was phenomenal. From the daily stats in the marketplace to the monthly performance comparisons, HOTSTATS was king. Plus the optimal measure of success? Market penetration and whose fair share you had stolen.
Benchmarking then was almost entirely like-for-like and it was the only real measure of peer to peer success, usually measured against like-minded operators up the road, or even next door. You were competing for exactly the same pound over and over again, and although we all had our ‘USPs’ and marketing metrics, frankly, there was little to split between us.
Occasionally, we looked internally too, using employee satisfaction surveys, and even more progressive (10 years ago), we looked at net promoter scores and guest satisfaction indexes.
All of us group or corporate city GM’s were focussed on these measures of success, meanwhile the world was changing from analogue to digital. Yes we were current enough to use booking.com to check what rates our competitors were selling and we mastered the dark art of distribution (albeit in those days manually); what we forgot about were the times we had misled the public, only marketed our best rooms and only promoted the good about our properties and our services. How much we had over-inflated ourselves back then.
The rude awakening came with the user-generated feedback sites; TripAdvisor and the like. They made life so much more complicated, and we hated them. We finally had to face up to our deficiencies; no you can’t sell those un-refurbished rooms at the same rate as the ones that were done last year; yes you can’t gloss over the shortcomings in the dining experience, leisure club or event facilities.
Were the sites abused? Absolutely in my view. For the first time ever, we had customers threatening us with bad feedback, some justifiably but many not so much; we had competitors creating fake bad reviews; and we still had head office expectations to manage, the wage percentages to deliver and the same GOPPAR to achieve.
Life just became much harder. Did we manage? Yes, in a fashion and we even got used to it, to a point. The really progressive, mainly independent properties, probably with some cash behind them, even thrived; they responded to the pressure, improved their services, facilities, refurbished, rebuilt and became something unique and new.
The advent of these sites definitely brought some unique and frankly positive changes to the industry too. We were being transparent about our operations, but we were also given a platform where we could really start differentiating from our nearby neighbours. Our USPs began to gain independent credibility and whereas before that pokey room in the beams of a 16th Century attic was a limiter to our TREVPAR, now it became the ‘authentic’ experience that commanded its own attention.
The sites ultimately cleaned up the poor operators and helped the good ones to shine, but what we certainly failed to embrace at the time was the necessary shift in benchmarking – we were still focussing on our nearby neighbours and still measuring their prices and market-penetration. The sites had forced change, but we’d failed to fully adapt to the shifting insight that was suddenly open to us.
As hoteliers, what we missed, and to varying degrees continue to miss, whilst trying to be everything to every person, is all the other options available to the consumer now. There used to be very clear lines between the designators; B&B was usually cheaper and operating within the host’s home, while hotels had their own property and were usually considerable larger.
There were different buying processes, and different markets and it was much easier to keep track of your ‘competitors’. Now however, the competitor pool is huge; boutique hotels, B&B’s, inns, pubs with rooms, self-catering restaurants with rooms, serviced apartments, homestays, glamping – the list goes on, but it basically represents guest choice.
So benchmarking is nigh on impossible now?
Probably; at least in the traditional sense. Now, you have your traditional segmented competitor sets: what are they travelling for within destination – leisure, town events conferences, business etc., for which you then need to consider the type of properties and facilities available within a reasonable geographic radius. This alone could have doubled or even tripled your ‘competitor’ pool.
Next, you also have your destination competitors: what attracts a customer to one location as opposed to another particularly as leisure guests are pursuing experiences rather than destinations. Next up it’s the comparison sites: who’s the cheapest, who has the best leisure club, service, breakfast, cleanliness; traditional measures, PR and marketing, star ratings, even EHO scores on the doors. So how in the heck are you supposed to measure parity across all these different factors?
The answer is try to be practical, fair and focussed. Historically, as well as less ‘competition’ to measure against, there were also less metrics, and less channels to check. Modernisation of industry has given us access to hundreds more pieces of info, but what many operators don’t stop and consider is which are the most relevant.
Our assessors can quickly and easily split operators into three camps; those who benchmark everything and anything obsessively; those who basically don’t benchmark at all; and those who take the habitual approach, doing what they have always done. Very few have taken the innovative approach, revisiting what business they want and how they want to compete for it and therefore what metrics are required and against which businesses, in a way that extends beyond the traditional designations.
My advice to operators therefore is this. Take a step back and consider the internal, before looking at how that affects the external. Use the user-generated measures, plus team enterprise and guest feedback to highlight first what you are doing well and which market you support the best, and then what aspects you can improve on, and whether these are intrinsic or opportunistic for your offering. Once you have reviewed and oftentimes re-established your competitive field, it becomes much easier to evaluate who you should, and who you do compete with.
Quality in Tourism assess hundreds of accommodation providers globally. To find out more about their assessments, gradings and mystery shopping services, visit www.qualityintourism.com.
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