The venerable institution of hospitality has been turning around over the past two decades. The combined impact of shifting demographics and new technologies are the primary catalysts for this metamorphosis. The Internet provides consumers an opportunity to think of the hotels as commodities. Hotels had been lowering prices to gain a competitive advantage from 2009 to 2013 but are now raising prices as quickly as possible, hoping that the music won't stop soon. The many changes occurring today are proof positive that this industry is no longer limited to being an "art." We have officially moved into the John Naisbitt coined "hi tech, hi touch" world. Led by revenue management but now including distribution channel management, social media marketing, Web 2.0 or 3.0, call it what you like and more, this industry has been transformed.

1. The Transformation of
Hospitality from Art to Science
Robert A. Rauch, CHA
HotelGuru.com

2. Factors of the Transition
from Art to Science
 Revenue Management
 Distribution Channel Management
 Reputation Management
 Social Media Marketing
 Web 2.0

3. Revenue Management is the set of techniques
that determine which reservation request to
accept and which to reject to optimize revenue
Hotel Pricing

4. Revenue Management
 Manage OTAs
 Packaging
 Risk factors
 Evolving traveler

5. Today, it is time for the industry to price
based on value perception and not just price
relative to a competitor.
Understanding the true demand in a
marketplace is quite scientific.

6.  OTAs
 GDS
 Hotel Direct
 Voice
 Hotel Website
 Social Media (the new player)
Distribution Channel
Management for Driving
New Revenue

7. Reputation Management
Travelers’ ability to access social networks anytime, anywhere
empowers them to create and consume more content than ever before
70% of travelers make decisions based
on reviews and responses on review sites.
Photo: hospitalityformulaconsulting.com

8. Social Media
• Capitalize on guest created content
• Create a virtual concierge through the property’s website or other
digital app
• Implement concise and impactful videos to enhance dramatic
imagery
• Utilize content marketing and real-time marketing
90% of travelers trust recommendations
from their friends and family more than any
advertising

9. Consumer Behavior
A = B x W x N
A- Attitude toward the business
B- Belief of a consumer that the business possesses
a particular desirable attribute
W- Weight of importance of the attribute to the
consumer
N- Number of attributes important to consumers

10. Science of Marketing
• Digital marketing
• Mobile
• Real time marketing

11. Digital Marketing
Digital marketing is the use of digital sources based on electronic signals like
Internet, digital display advertising and other digital media such as television
and radio.

12.  47% of travelers research options
using their mobile device
 31.6% will actually book their
travel on a mobile device
Photo:Marriott.com

13. Real Time Marketing
 Real time marketing (RTM) isn’t planned, it just happens
NASA’s Tweet During the Oscars Oreo’s Tweet during the Super Bowl

14.  Utilize Facebook apps to highlight unique features
 Feature guest generated content
 Guest should be able to communicate with property
 Video campaigns generate guest engagement
Real Time Marketing

15.  Millennials
 Expectation of more international visitors
 Booking more profitable business
 Innovative technology
 Sharing economy/Disruption
Today’s Top Hospitality
Trends

16. Party for one, but hanging out together
 Fastest growing segment
 Special designs with Millennials in mind
 Will turn to social media to voice opinion
 Lack loyalty
Millennials

17. Chinese Travelers 2015 and
Beyond
 Visa Waiver Program
 Longer stays
 Spend more money
 Mandarin Chinese is the most spoken language
in the world

18. Booking more profitable
business
• Improve distribution channel mix
• Less reliance on relationships with OTAs
• Content is King
• Provide WOW customer service
Photo: investingtra

20. Copyright 2015 R.A .Rauch & Associates
Threat of New Entrants
Bargaining
Power
of Buyers
Bargaining
Power
of Suppliers
Threat of Substitute Products
Rivalry
Among
Existing
Firms
PORTER’S FIVE FORCES

21. are your strategies in line with hospitality as
a science?
Read more on the transition of the hospitality
industry from an art to a science here

22. Thank You
@truehotelguru
HotelGuru.com
CEO, RAR Hospitality