Group 1
Strategy that works today might not work tomorrow. Many speakers mentioned that the only way to survive is to remain agile. Forecasting methods have changed significantly (only looking at recent data) and most of them were looking at short term rather than long term goals due to the unpredictability of the situation. Government restrictions and quarantine laws may change very quickly and hotel owners have to constantly adapt based on how the situation unfolds. The speakers talked about rapidly adapting to changing priorities.
Strategies that work in a region might not work in another. Cultural differences play a big part. Different cultures result in different mindsets. When a company needs to change, the mindset at the top has to change first. Only when the people have changed their mindset, only then can the values of the company change. Thus, a top-down approach is always preferred during consultation.
The key focus has shifted from generating revenue to profit optimisation. Many had to come up with alternative sources of cash flow to tide through the months. Mrs Tracy Dong mentioned that there was a greater emphasis on looking at expenses and P&L to understand the total value from each customer. One prominent example would be the elaborate customer segmentation in the casino industry.
Mr Tejveer mentioned that the most surprising thing he learnt during the pandemic was that his hotels could operate at 20-30% of the manpower. Manpower scheduling has become a lot more flexible with the mix of permanent and temporary labor as well as enabled by technology and AI. Mr Kamesh shared a similar view that technology has become a core rather than an enabler. People had always been scared that tech was replacing them but according to him tech helped to evolve the people during the pandemic.
Mr. Suneet highlighted that the support functions such as the HR and Finance became the main functions in the pandemic era. Mr. Tarandeep agreed with this, since the pandemic made him and his fellow colleagues realise the importance of employees and their welfare in terms of physical and mental health. He also mentioned that covid challenged everyone to rethink their business models and helped them realise that any rate was a good rate as long as it was taken at the right time such that revenue was flowing in to meet the minimum cash flow required to sustain the business.
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Group 2
| Insight 1 |
Businesses need to invest in technology to keep up with the changing times and  landscape due to unexpected situation such as Covid-19. Technology helps to achieve flexibility and agility in hotel’s revenue management. Hotels should not just use databases and cloud for reservation and front house matters but expand into housekeeping and back of the house digital marketing. Management can use data analytics and detect changes in consumer taste and preference. More consumers are visiting hotels for leisure and there is a boom in the local market. (Previously, the reservations in hotels are for mostly tourists and business). Therefore, management can effectively target the correct consumer segment especially locals during Covid and use digital marketing to attract them. |
| Insight 2 |
| Revenue managers need to learn to be more open and receptive to new ideas and change. COVID-19 brought about a lot of uncertainty to the hotel industry and managers have to scramble to come up with new strategies on the fly to adapt to new situations. There is no time for the team to hesitate and be stagnant in their strategies as first mover advantage is critical. Ideas can fail but this is something the team needs to accept and take it as an learning opportunity. As we move past this pandemic, hotels should start integrating a culture of innovative thinking into their teams, to look for new sources of inspiration to better serve their customers and build greater customer loyalty. |
| Insight 3 |
| As COVID-19 has impacted the whole world, revenue managers are making use of recent data to forecast their demand due to the change in circumstances. The data is not restricted to internal data only, external data are taken into consideration when revenue managers are doing the analysis. External data such as the customer’s web activities through google analytics and web analytics tools, how the customer books the hotel, the segments they belong to. Furthermore, the analysis could be drilled down further into micro level to see which sub-segments the customers are from, examples of these sub-segments would be whether they are couples or families or friends or business relationship. Making use of backend analytics to help track the different types of customers could help revenue managers to forecast the business’ demand more accurately. |
| Insight 4 |
| Revenue Management is an area that has to be flexible and adaptable. Being creative to re-invent old methods or strategies might work when faced with new situations and target markets. With COVID-19 making a huge impact on the hotel industry, Revenue Managers have to think deeper and understand their hotel, organisation values and customer segments to be able to add value to the customers, attracting them to continue supporting their local hotel brand. Loyalty is also very important, which is built upon good customer relationships with the guest. Moving forward, these lessons learnt especially the mindset and attitude formed to strategise from COVID-19 will be applicable in the future. The importance of having the right attitude and mindset would be able to improve the organisation. |
| Insight 5 |
| With the onset of COVID 19, local demand came to the spotlight for revenue management. With different cities and countries having a different set of preferences, tastes and perceptions, revenue managers had to double down on their local markets separately. For instance, in China, the laundry business was huge so some hotels had an entire floor where consumers and nearby hotels could get their laundry done. In places like London, hotels capitalized on their empty kitchens to open up cloud kitchens for food delivery as an ancillary revenue stream. Leveraging on new sources of data such as Google analytics and analysing local trends, would help to inform their strategies. Hence, given that different regions have different demands, it’s become even more important for revenue managers to have a firm data-driven grasp on the local market while being flexible to customise the solutions for their excess capacity and new consumer needs. |
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Group 3
The first key takeaway was from Brian Tan which is to be adventurous. The pandemic has forced the hotel industry into a survival mode and look for ways to diversify their incoming revenue streams. Brian has pointed out that while it is important for hotels to take a step forward in stepping out of their comfort zone, many hotels are afraid to deviate from the conventional patterns of generating revenue. Hence, this could potentially place hotels in a position where they might not even be able to survive. Taking a step forward into a different direction, however, opens the opportunity for hotels to at least scrape by and come out at the end of the pandemic. It is important to at least take the first step to try something different. From there on, hotels could then assess the outcome and take corrective action as needed. Such takeaways could not only benefit from a pandemic, but also other financial situations of the markets and is an agile learning point that would be beneficial for the industry.
During our final discussion with the entire class, we discussed the importance of uncertainty management and utilising the design thinking process which requires an open-minded perspective towards failures and experimentation of processes. During the covid 19 period, there was a lack of historical data due to the newest of the pandemic. The closest point of reference was the SARS pandemic caused during 2002. Hence, it was also important to seek data from other industries and to adopt strategies that helped these industries to better manage the uncertainty caused by the pandemic. Our guest speaker Heidi Gempel proposed that empathy was crucial to develop solutions that are essential to addressing the customer’s needs during this pandemic which would help to better retain their loyalty.
Stakeholder management was another key lesson that was highlighted in our discussion with Ying Hong and Celine Quek. Both speakers highlighted that the hotel industry rarely ventured to seek other revenue driving activities during the non-pandemic periods, especially when there is a high occupancy. Often these proposals were faced with opposition from their upper management to further justify the additional costs of incorporating these activities, but as hotel rooms are generally the one with higher revenue margin, it is harder to get new revenue sources approved. Moreover, Ying mentioned that MBS has several business units, with the key revenue drivers being the Casino and gaming operations. Hence, the actual hotel segment might not be the key revenue driver, which is of lower priority when it comes to revenue management. However, the pandemic had reduced the number of overseas travellers and further diminished the revenues derived from the casino operations due to safety restrictions and limitations in air travel. Hence, new revenue driving segments needed to be developed to retain the hotel’s revenue out of which the concepts of staycations, food catering options were able become the hotels revenue driving segments. Therefore, we would like to highlight that the management of stakeholder’s expectations towards change is especially important going forward as it allows organisations to experiment and develop multiple channels of revenue to ensure productivity and profitability in the long run.
Lastly, the ability to gain first mover advantage was another key factor that was consistently highlighted in the breakout sessions. Being the first mover in the hotel industry often make them the industry leader, and thus, allow them to have an edge over the others. To be the first mover in the industry, Brian has stressed that it is important to be agile and allow the organisation to adapt quickly to the new trends in the industry. It is also critical that they are willing to try and experiment with new initiatives and accept failures. An example would be how MBS quickly identified the opportunities regarding MICE and subsequently developed hybrid studios to capture that new revenue stream. We strongly agree to it as Ying also mentioned about being the first to start a new initiative as it would capture the attention of customers and to create awareness about the company. It would also highlight the company’s adaptability and agility.
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Group 4
After the exciting and insightful roundtable session with industry experts and guest speakers in revenue management, our group has consolidated the key lessons learnt from their expertise and experience. We had the pleasure of speaking to Mr Sharad Kapur, Mr Tarandeep Singh, Dr. Detlev Remy, Ms. Limin Cheng and Ms. Ying Hong. These are our takeaways:
Firstly, we need to master the ability to ‘Fail Fast’. The best way to innovate and adapt is to identify what works for us and what does not work. The vital aspect in this discovery process is speed and efficiency. As much as we spend tremendous efforts in brainstorming new and creative ideas to deal with uncertainty and unforeseen circumstances, we must be able to execute and implement them as quickly as we can. With rapid idea-to-action, we can promptly change and adapt our strategies or operations to deal with ever-changing circumstances. For example, in light of the COVID-19 pandemic, many hotel revenue managers have come up with ingenious ideas to increase revenue streams as a result of lower room occupancies, such as converting and renting out ballrooms for badminton games. While it is great to come up with such ideas, the hotels have to trial and implement it within a short period of time and review the success in increasing their revenue streams. If they do not execute on it swiftly, it would be extremely difficult for hotels to adapt even if they are innovative and have the capabilities to design unique solutions to deal with uncertainty. Additionally, circumstances might change again, rendering ideas obsolete. Hence, what is crucial is to fail fast, discover what works and what does not work as soon as possible, and build on the solutions that best benefit the companies.
Secondly, from a more personal perspective, we ought to stay resilient and determined in our interests. If we are truly interested in a particular industry, whether it is hotels or airlines or any other industry, we have to stay confident and stay in the industry. We should not be demoralized or shaken just because the industry we have keen interest in is going through a phase of difficulty and uncertainty. As a matter of fact, it is during the tough times where the learning opportunities are enhanced and plentiful. An extremely astute point brought up by guest speaker Limin Cheng from her personal experience when she entered the industry during the 2008 financial crisis, was that she gained valuable lessons learnt within a short time frame which normally would have taken several more years. As we ride on the recovery phase of the industry following a crisis such as COVID-19, the lessons we can take home are remarkably unique and it gives a more substantial and deeper understanding of the industry. What are some of the avenues of opportunities in the industry and what are some of the obsolete trends in the industry? We get to discover the answers to such kinds of questions during a crisis which gives us much more wholesome knowledge of the industry.
Lastly, historical data used to be one of the main data points used to forecast demand. With COVID-19 closure of country borders and country wide lockdowns, the common consensus within the hotel industry is that data has become obsolete because there is completely no incoming demand. Furthermore, not everyone in the hospitality industry studies Analytics and embraces data with open arms. However, this does not mean that revenue managers stop planning and forecasting ahead. In fact, the best hotels use technology as an enabler in these times to look forward. Revenue managers have started to adopt outward forecasting methods, looking into data such as flight data from different countries, keywords searched on search engines and many more. This would give revenue managers a better understanding of consumers and forecast demand effectively even without historical data. In a nutshell, data will never lie and become obsolete, you just need to know where to look.