Today’s hospitality brands operate in an extremely competitive environment, one in which the optimal strategy for pricing their inventory is constantly evolving. Travelers are looking at hotels and comparing prices side by side on metasearch websites, Google search, and online travel agencies (OTA). Hotels need to be able to respond to competitors’ changing pricing strategies and optimize their availability and prices based on changes in demand, seasonality, and special events. Keeping up-to-date with recent and relevant information that shows what customers are looking for, competitive pricing, and market performance is key to success.
Smaller, independent hotels have traditionally been at a disadvantage because they are unable to make the same level of investment in technology as larger hotels and chains. “We’re witnessing chain hotels place significant investment in technology, which opens the potential for a greater divide between properties that are not able to match those investments,” said Ait Voncke, senior vice president of Lodging Partner Services Account Management at Expedia Group. Also, as a result of being part of a hotel group, chain hotels have access to more aggregated data, including how the market is performing, how other properties of the same chain are performing, and so on.
Today, technology has the power to level the playing field for hoteliers of all sizes, but access to technology varies significantly. Due to limited budgets, small and independent hotels often find new technology too expensive to adopt or integrate within their own workflows. Also, given the multitude of responsibilities that leaner teams have to juggle at these hotels, the technology needs to be efficient too. This is where solutions like Expedia Group’s Partner Central provide significant benefits. It helps to streamline everyday tasks like updating availability and rates based on relevant and real-time information. For instance, the platform provides data around revenue earned, performance relative to competitors, and the market in general to help hotels make more data-driven decisions.
Key findings from Expedia Group’s study about barriers to tech adoption
To understand the technology challenges that hotels face, small and independent hotels in particular, Expedia Group surveyed more than 1,200 hoteliers in July, 2019. Their findings uncovered a disparity in technology investment and adoption between smaller, independent hotels and chain hotels.
Nearly half of the small independent hotels surveyed reported that technology investment decisions are based on affordability and value. While larger hotels tend to care more about how a new technology will integrate within their existing workflows or systems, smaller hotels are more concerned about the cost implications. The study also found that chain hotels are nearly twice as likely to prioritize investing in technology compared to independent hotels. Independent hotels are 1.5 times more likely than chain hotels to instead prioritize room renovations.
However, as technology adoption among hotels increases, small, independent hotels risk being left behind in the race to improve back-end operations with smarter and more data-driven revenue optimization strategies. According to Hospitality Technology, a whopping 54 percent of hotels plan to increase their technology budgets for 2019.
Some of the other challenges mentioned by survey respondents related to technology deployment include difficulties integrating with existing systems, too much complexity, and lack of vendor support. One in four small, independent hotels in the survey cited complexity as their biggest challenge when adopting technology, with one in three saying that ease of use is a priority when evaluating potential solutions.
Overcoming complexity with simplified solutions
The deployment of technology may seem daunting for independent hoteliers. But online travel agencies such as Expedia Group are trying to enable small, independent hotels to bridge the technology gap by offering easy to use solutions as part of a familiar partner platform. Available for free for all hotels registered on Expedia Group, Rev+, for example, is the revenue management tool that provides information on how a hotel is priced relative to their market for the next 90 days, what future demand looks like based on data aggregated across all of Expedia Group’s portfolio of websites, and if other hotels in the market have made changes to their publicly displayed prices in the past 24 hours, plus much more.
For most hotels, these analytics and insights take the guesswork out of pricing decisions. A hotel in New York, for example, close to a concert venue does not have to make assumptions about whether a particular concert will impact demand for overnight bookings. A spike in searches across Expedia Group’s portfolio of websites will show a spike in demand on those concert dates, thereby empowering these independent hotels to optimize their prices and availability to maximize earnings and occupancy rates.
In order to make the best pricing decisions, hotels must also take market data (such as availability in the area) and competitive pricing information into consideration. A hotel in a small town might not just be competing with other hotels in that town, but also hotels in nearby towns that are only a short drive away. While the hotels in these nearby towns are not technically in the hotel’s immediate market, Expedia Group’s access to millions of data points allows it to leverage economies of scale to highlight these trends to its users. It also allows hotels to tailor how they use the tools, giving them the ability to select their own competitive set, automate some of the tasks, and set parameters around what kind of actions they are willing to take.
According to a 2018 study from Skift Research, many travel companies see themselves incorporating next generation technologies into their digital roadmap in the next couple of years. With many travel companies either focused on or adopting new technologies, hoteliers need to invest in emerging tech sooner rather than later if they want to be leaders in the industry.
Employing the right systems can empower independent hotels to streamline their operations by eliminating time consuming tasks and making them more competitive in the marketplace. As technology becomes more imperative to managing a hotel’s performance, small, independent hotels no longer need to make trade-offs between adopting technology and other operational undertakings with the help of the right partnerships.
For more insights about this survey, visit Expedia Group Lodging Partner Services.