As hospitality organizations accelerate recovery strategies, chief commercial officers across the industry have been put in the driver’s seat. We’ve seen the CCO position take on a growing repertoire of responsibilities in a relatively short time since its widespread emergence. Now these leaders are quickly becoming the stewards of revenue management as well within their organizations.
With strides in new technology—among other factors—driving sales, marketing, distribution and revenue management to coalesce under one commercial discipline, hotels are seeing a growing need for skilled CCOs who know how to align these silos and use the right tools and tactics to help their organizations thrive—if the industry permits it.
Hoteliers are increasingly relying on technology and data to divine the future trends taking place within the industry, only to miss out on new opportunities by falling back on old strategies and practices. Therefore, the responsibility has fallen to the CCO to take the wheel and work across multiple divisions to create new strategies that make sense in today’s shifting climate. Technology is only part of the revenue puzzle, and as the industry’s foremost explorers, this is no time to lose direction following old wisdom.
Simply put, hospitality remains set in its ways. Rising costs, fewer workers and the looming specter of burnout have pushed the industry to continue operating on outdated ideas without taking the time to slow down and adapt to the new marketplace. It’s akin to driving down the road on a flat tire—with a perfectly good spare sitting in the trunk.
Hoteliers must allow themselves to pause long enough to consider the impact that advanced, automated technology can have on the efficacy of their internal processes. But this requires both a willingness to change and putting the right commercially minded leaders in place to oversee the process of building something back up better than it was before.
Understand the Value of Technology
Hotels are relying on technology innovations to drive their commercial growth in 2022, but hotel leaders do not always know the return on investment for these tools. For example, digital marketing spend has increased exponentially over the past two years, but it is not always clear how effective this investment is in the long run. The issue may be that the way some organizations are measuring the success of these initiatives is flawed.
Hotels can—and should—know how effective their marketing campaigns are, particularly involving promotions. In order to do so, operators need access to a variety of data points and metrics that are often difficult or impossible to share internally due to outdated data strategies. Optimizing your organization’s digital marketing efforts should be a priority, but this barrier prevents hotels from understanding the true ROI behind investments.
Operators can optimize their distribution channels and offer more pointed promotions that get to the heart of travelers’ desires as long as data is able to cross channels in a hotel’s tech stack. This solution requires an expanded data strategy supported by a strong technology partner that is prepared to go the extra mile when providing support. Some hotels may require new technology to remove their data bottlenecks, whereas others may simply need to shift their internal processes and alter the way departments share information.
Committed technology partners are able to not only help hoteliers improve their data delivery methods but can also help CCOs think about technology in new ways to continue to evolve the business and help them face the rising challenges of tomorrow.
Choose the Right Partners
Bringing down the silos separating each business unit in hospitality requires an initial investment in new ideas. First, because everything within the property is linked, from the restaurant to the rooms, all shifts in revenue for each of these units are relevant to the success of the others. Second, every hotelier wants access to a precooked solution guaranteed to optimize their hotel’s revenue and data strategy, and such a system might not be packaged in a way hoteliers can recognize without engaging with their technology partners.
Revenue management technology has come a long way over the past decade, but this may be a surprise to the many hoteliers in the industry who are still clinging to outdated technology. Today, few organizations in the marketplace have the resources, or time needed, to internally develop and implement a competitive revenue management system of their own.
Rather than take a risk on developing these systems in-house, many hotels rely on technology partners to collaborate and deliver the right solution. The challenge for the industry is twofold: Hotels must be able to locate a technology partner they trust, and they must be willing to make time to work with them to truly optimize the investment.
Strategize for Tomorrow
In the end, it all comes back to the chief commercial officer. By committing to collaboration, hotels and technology partners can change the way they rationalize business decisions, but the CCO must be tied into the process from the start. CCOs could potentially report to just about anyone within a commercial organization, from operations executives to the company CEO. This can be a gift for a CCO when they are properly positioned and equipped for their role—or a curse if their business environment is too resistant to change.
The only certainty shared by everyone across the hospitality industry is that more change is coming, not less. Hotels will grow more dependent on data to remain competitive, and revenue management is going to grow in prominence as a discipline. To take advantage of this, CCOs will need to clarify their position within their organization and take charge of the technology they need in order to steer the organization towards future growth. This starts with having the right conversations internally within your sales organization and being upfront with your goals from the beginning.
The longer hoteliers wait to empower the CCO role, the more difficult it will be to unlock revenue and profit growth in the future. The level of competition is continuing to rise across the industry—in fact, it is keeping pace with the rapid shifts in travel norms taking place everywhere. Hotels can no longer afford to operate without a data-driven commercial strategy to grow revenue in 2022 and beyond. Now is the time to forge long-term, scalable partnerships with technology providers they can count on.
Sanjay Nagalia is COO and CTO at IDeaS.