What's on the minds of Revenue Leaders in Australia?

HSMAI convened leaders from big brands, small brands and Parks for a great discussion on the issues and opportunities in the Pacific markets.  The topics were varied and inevitably show us the issues on the minds of senior leaders in 2023.

HSMAI Sydney Revenue Leaders Roundtable: Key Insights for Hoteliers

30th August, 2023

The HSMAI Sydney Revenue Leaders Roundtable held on August 30th, 2023 brought forth enlightening discussions targeting hoteliers, especially those in Revenue Management and Commercial roles. Here are the top insights from this significant assembly:

1. Business Volume Challenges:

• Business Travel Dips: Business travel stands at a mere 30% of pre-COVID figures, causing hotels to pivot and focus more on domestic tourism.
• Changing Dynamics in Asian Markets: Chinese business travel remains sluggish. However, it’s notable that younger Chinese travelers prefer independent over group journeys. Positive news is the resurgence in business from Indonesia, Korea, and Japan.
• Reassessing Competitive Sets: With shifting market segments, 2024 is the year for hotels to reconsider their CompSet.
• Airline Constraints: Sydney’s hotel industry faces challenges due to airline seat capacities. Conversely, Melbourne is battling increased room supplies in recent years.
• Lengthier Stays: LOS (Length of Stay) has surged by 100-200%. Remarkably, Korean travelers now stay between 5.7 to 6 nights, up from the previous 3.5 nights.
• The Canberra Market: Drive markets to Canberra are lagging. But intriguingly, properties aren’t dropping rates. Is this an indicator of a maturing market?

2. Profit-Oriented Revenue Management (PORM):

• Restaurant Concepts: Australian hotels could learn from their Asian counterparts in formulating innovative restaurant concepts to drive traffic. For instance, Ovolo’s “plant-based” concept is praiseworthy.
• High Operating Costs: Exorbitant wages in restaurants make profitability a challenge.
• Revenue Management for Ancillary Products: Only a handful of brands in Australia currently involve revenue management in ancillary products, despite its evident success overseas.

3. The Role of Data in Revenue Management:

• Future Data Use: The looming question is – what kind of prospective data should hotels prioritize?
• Technological Imperatives: The importance of a robust tech stack can’t be overstated. Given the recruiting challenges, tech can assist in staff efficiency. Tools providing evidence for decision-making empower staff, ensuring guest satisfaction.
• Data Analytics: There’s a growing need for data warehouse tools and platforms like PowerBI for data crunching and trend analysis.
• Unified Dashboards: A holistic dashboard displaying metrics like NPS score alongside rate and profit numbers, coupled with cost trends, can facilitate better understanding and actionable insights at property levels.

4. The Return of Rate Parity Issues:

• Challenges in Distribution: With inbound tourism making a comeback, distribution challenges have resurfaced.
• Dynamic Rates: Few static rates remain, and disparities are now evident in dynamic rates.
• Direct Business Impact: Discrepancies in rate parity affect the volume of direct business, leading to reduced percentages of direct business.
• Tools to the Rescue: Platforms like Triptease shed light on discrepancies, showing instances when third-party channels offer lower rates.
• Empower the Frontline: By allowing reservation staff to match lower rates, hotels could potentially bolster direct revenue.
• Addressing Fraud: On the darker side, fake bookings for visa applications persist. However, the silver lining is the efficacy of 2FA or MFA in curtailing credit card fraud.

In Conclusion: The HSMAI Sydney Revenue Leaders Roundtable has underscored several areas demanding strategic shifts, innovation, and adaptation. As hoteliers prepare for 2024, these insights can act as a beacon in these ever-evolving times.