The hospitality industry is more data-driven than ever, yet marketing and revenue teams are still dancing to different tunes – and that digital disconnect is costing real-life revenue.
Hotel marketing budgets are often only two to three per cent of total revenue in a sector with a low percentage.1It is important to note that there is a very small margin of error. Yet, many marketing campaigns continue to be created and launched by teams who have no idea about booking speed, demand forecasts or price sensitivity. This data, when accessed via a sophisticated RMS system, helps marketers to target the right segments and time their campaigns for periods of genuine demand.
The consequences of a misalignment are predictable and expensive. The campaigns may be run at times of high demand, when the rooms would have been filled anyway. Or they could include unnecessarily steep discounts that reduce margins. This misalignment is common across all properties and portfolios.
Commercial impact can be huge when marketing and revenue teams work together. Marketing drives demand. Revenue management ensures demand is monetized effectively. Together, these teams are able to identify times of real need, implement targeted campaigns, evaluate success by using metrics that reflect revenue outcomes.
Demand intelligence should be used to inform marketing decisions, just as revenue teams use it to optimize pricing and availability.
Recent IDeaS panels, including leaders from StayCity, Maybourne and Maybourne, highlighted this urgent alignment. Participants emphasized the need for transparency in data, shared KPIs and coordinated timing of campaigns. Demand intelligence insights are used by revenue teams to optimize pricing and availability. Marketing decisions should use the same insight. As marketing budgets come under increasing scrutiny, access to forward-looking data that – until now – was traditionally reserved for revenue managers is becoming essential.
The use of technology can help bridge this gap. Modern tools enable marketers to identify high-potential periods and tailor their messaging and tactics to changing demand. They can also evaluate the performance of campaigns using commercial metrics like occupancy, ADR and RevPAR. The same revenue forecasting models can be used by marketing teams to make more accurate decisions.
This shift is a reflection of broader industry pressures. CMO Council research indicates that 86 percent believe that missing revenue and growth opportunities are due to capability gaps, and more then half feel pressured to reduce costs and improve efficiency.2. These concerns are shared by our own clients, who seek integrated solutions that link marketing actions to performance outcomes and reduce the reliance on manual analysis of data. Hoteliers who have a data-driven, unified strategy will succeed as guest expectations increase and market conditions change rapidly. It’s no longer a question of internal alignment. This is a strategic requirement. Collaboration between marketing, revenue management, and sales is more than just a way to safeguard performance. It helps to build a foundation for long-term and sustainable growth.
1 Hotelmarketingworks.com
2 CMO Council Marketing Vitality Index
