|by Craig W Cooley, Marketing Director, Good Nite Inn Mgmt, Inc.
September 13, 2005 - There are exciting and profound new opportunities in an industry that is likely the second oldest industry on earth, hospitality, you can speculate on what the oldest one is. If the hotelier is smart I feel they can achieve sustained revenue growth and increased operating profits, imagine that! Specifically, I am referring to the tremendous opportunities provided by the de-regulation of the GDS and the increasing impact of both the internet, the computer hardware/software systems tailored to our industry; how this technology has totally changed our culture in the way we do business and the behavior of the consumer and their shopping habits. This technology is not going away, it cannot be minimized in any manner, it will constantly evolve, and it will frequently change. If we are careful and intelligent about how we utilize it, it will at a minimum sustain us, at a maximum, make us wealthy beyond our most aggressive and optimistic promoter / persuader’s sales forecasts!
The hospitality industry is indeed undergoing profound technological changes affecting nearly every aspect of the way we do business, from on-line reservations to revenue yield management. The effects of this revolution are likely to be as far-reaching in our industry as the effects of computerization and de-regulation have been in the airline segment. Consider that on the one hand, these changes allowed agile, aggressive new companies such as Southwest Airlines, and more recently JetBlue, to achieve previously unthinkable growth in their market share, while leading to the demise of respected brands such as Eastern and PanAm. Southwest became successful by embracing and capitalizing on a changed operating environment. Eastern and PanAm failed to adapt and became industry dinosaurs as they attempted to fight against the realities of the new environment.
What the hospitality industry is currently facing is warp speed technological changes wrapped together with the de-regulation of the GDS, being similar to the airline industries de-regulation. This has created a profoundly changed operating environment, full of both opportunities and potential pitfalls. For example, in terms of on-line reservations and wholesale brokers (e.g. Travelocity, Orbitz), it’s vital to maximize the impact and sales these third party channels, or brokers, can deliver. At the same time, new computer-based yield management tools must be used to ensure the optimum balance between direct and discount reservations in order to derive maximum yield from your product. It is also no longer so important to consider “market segments” as it is to consider “market sources”, or “revenue sources”. We can control them, we can mix them, and we can blend them for the maximum REVPAR, easily, with the click of a laptop key while we sip margaritas in Costa Rica! Today’s new computer tools allow hotel companies to tune and direct their sales mix and operational practices in ways that were simply not possible even just 5 years ago. The organizations that are successful will be those that take advantage by integrating all these tools into a well-planned and executed program.
Certainly no other industry is as great of a “fit” with this technology as is the hospitality and tour industry. It by nature brings detailed and intelligent information to the consumer in a medium that is up to date, fast and easy to use. Think, what could be a better method to communicate to everyone, everywhere, our products and services that are always in a remote location, than through electronic images? It is a total and complete “home run”.
How do we respond? It is time to develop our “Human Capital” with intelligent “technologically” trained property managers, or “Business Managers” as I prefer to refer them to as; develop our “Technical Capital” with ASP configured, user friendly, sales driven computer systems in real-time; and develop our “Social Capital” with an intelligent understanding throughout all levels of management and ownership of how this new era, this new dimension, and these three capitals are balanced to bring the greatest level of success.
This is not an easy task, particularly when two of the capitals involve substantial cultural changes in the way we do business, “Human and Social”. Changes that for many are not part of their “skill set”, or merely the change in and of itself is a formidable obstacle. For me I think it is likely sink or swim. We can embrace and lead the pack, reap the rewards, or we can dismiss the changes as insignificant and become casualties of our industry and dinosaurs of the past. I much prefer the former and a second home in Costa Rica where I can sip margaritas on the beach!
* This article was first published by Intellatech Marketing
based in Los Angeles, CA.
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