In the world of commercial strategy there are topics that often remain taboo. Yet it’s precisely these subjects that can spark healthy debate and lead to better ways of doing business if approached thoughtfully. Here’s a closer look at seven subjects you’re not supposed to talk about in commercial strategy.
1. The Real Cost of Discounting
Discounting is often seen as a quick fix to drive bookings, but it can undermine long-term profitability. Revenue leaders need to decide whether short-term gains negatively impact brand perception and pricing integrity. They also need to analyze whether the client is experiencing any real world benefits of discounting and if it’s having a positive impact on guest experience. A great promotion depends on positive perception, so make sure it is aligned.
Insight: Implement a value-based pricing strategy that emphasizes the unique features and experiences your property offers, rather than relying solely on discounts. This shift can help maintain pricing integrity and build brand loyalty.
2. Bundled Offers, or Bumbled Offers?
While bundled offers, like including parking with a room rate, can be attractive to guests, the actual value must be clear. If customers don’t perceive the savings as significant, the promotion can fall flat. It’s essential to evaluate whether bundling truly enhances perceived value or simply adds complexity without benefit.
Insight: Test different bundling strategies and gather feedback from guests to understand their perceptions of value. Use this data to refine your offerings and ensure they resonate with your target audience.
3. The OTA Love-Hate
Is “OTA” a dirty word?! If you’re feeling fed up with OTAs, consider this: is it a bad relationship or are you simply not doing enough on your end to maintain a healthy channel mix? It’s commercial leaders who should be safeguarding direct bookings and avoiding over reliance on OTAs, not blaming them for all their troubles.
Insight: Consider how you are balancing OTAs and direct bookings. If over reliance is an issue, first look inwards for the answer. Not planning ahead? Not investing into book direct? There is more in your control than you think.
4. The Organization-Wide Dangers of Communication Silos
Silos within an organization can lead to inconsistent messaging and missed opportunities. Revenue management must engage with sales, marketing, and operations to create a cohesive strategy. Confusing buyer experience is what we want to avoid at all cost, and this can only be done by interdisciplinary teams collaborating.
Insight: Regular interdepartmental meetings and collaborative projects can promote a shared understanding of revenue goals. Consider utilizing technology that allows real-time data sharing to enhance transparency across teams.
5. Is There a Growing Disconnect Between Revenue Managers and Teams?
Traditionally, revenue managers have been seen as data-driven analysts, often disconnected from the property-level team. With the rise of remote work, there’s a growing need for revenue managers to engage with on-property teams and understand the nuances of operations.
Insight: Be present, spend time on-site, and participate in daily operations. This hands-on experience helps gain valuable insights into guest interactions and operational challenges, ensuring a more cohesive strategy.
6. The Ethics of Data Usage
With the abundance of data available, ethical considerations around its use often get overlooked. How do we ensure we’re using customer data responsibly while still optimizing our revenue strategies?
Insight: Develop clear guidelines for data usage that prioritize customer privacy and consent and work with providers that do the same. Transparency with guests about how their data will be used can build trust and enhance your brand’s reputation.
7. The Leadership Gap in Commercial Strategy
The skill set required for effective commercial strategy goes beyond analytics and cohesive teams. Today’s leaders must also possess the will and the know-how to articulate strategies to ownership and asset managers, the very people who will be signing off on the budget and allocating resources.
Insight: Investing in leadership training programs focused on communication, negotiation, and strategic thinking can equip revenue managers with the skills needed to manage key stakeholders effectively. Using the right tools and platforms to convey information clearly is also a plus.
Discussing these taboo topics in commercial strategy is often overlooked, but essential. Open conversations about the challenges of revenue management can help break down barriers that hold back growth and safeguard long-term success.
Parting thought: think about how addressing any one of these often-ignored subjects could not only improve your revenue strategies but also enhance your organization’s culture.
For more information on how LodgIQ can help you to improve the commercial strategy practice at your hotel, get in touch here.
