Expedia Group CEO Peter Kern believes that 2023 will be the year that we stop predicting a travel recovery and actually start enjoying it. In an interview with Bloomberg, he said further: Summer 2022 will be the busiest travel season ever. But after two years of little to no demand, many hoteliers have started to look beyond traditional room revenue and warmed up to the opportunity which lies in non-room revenue. With a possible record summer ahead, will the idea of total revenue (and total revenue management) remain a focus for the industry or will we revert back to business as (pre-pandemic) usual? So the question is: Should hotels look to diversify their income streams and when is this the right time to do so? What should hoteliers be looking out for in the process and where is the opportunity?
Founder at Infinito
Rate Parity in itself was a flawed and BS concept from the get go, only putting more powers on OTA s and tech vendors making money of selling parity data to hotels. If we look at other industries: buy a TV in shop 1, same TV in shop 2 cheaper. Petrol same thing..even strawberries from the same brand in 2 different shops having a 25% variance in price?
so the question is not, is it obsolete? the question should be: how are we getting out of this mess?
What we forget mostly is that OTA s and Hotels both want the same thing: increase revenues. OTA s do that by competing against other OTA s with the same products (lie supermarkets), hotels do that by competing on value and price (like a variety of strawberry brands on the shelve). It is in no ones interest to sell cheap rates because it will drive down commission cost and revenue for the hotels. OTA s use member rates to undercut other OTA s..Hotels undercut their competition to steal business from them.
Managing Principal, ZS
Industry has been talking about moving beyond rooms revenue for decades. Concepts like Total Hotel Revenue Management have been extensively talked about, but not systematically acted upon. The pandemic forced operators to think very differently about the building, moving away from defined space usage, to a more flexible, need-based model. This forced innovation, and its (relative) success in generating revenue in difficult circumstances, will hopefully be the motivation to stop talking and start acting!
However, for this to become a true shift, the barriers that held industry back from achieving the vision pre-pandemic will still need to be addressed. Incentives will need to be realigned away from narrow function based goals like room nights generated, to more broad asset based goals like total profit or total revenue. Metrics will need to be developed that reflect these new goals. Access to more holistic data will be required, so that each de