Hotel Pricing in a Social World: Driving Value in the Digital Economy

TAKE CONTROL OF REVENUE MANAGEMENT IN THE DIGITAL ECONOMY

Hotel Pricing in a Social World prepares hotel executives to survive and thrive in today′s highly competitive market by outlining how to build profitable pricing strategies. This groundbreaking book taps revenue leaders from around the world who are driving their organizations with analytics to share their best practices, personal experiences, and data to facilitate your own revenue improvement. The answers to improving your hotel′s revenue lie in your customers′ behavior, and now you can discover what they are telling you about your brand by:

Grasping the practical application of key concepts through original research, case studies, and industry examples Exploring the variety of factors affecting revenue management and the skills and competencies revenue managers will need in the future to stay in demand Capturing, storing, and accessing the high variety, velocity, and volume of data available to hotels Following proven steps to use revenue management to profit from market opportunities and overcome challenges

Open up new opportunities for career advancement and higher profits with Hotel Pricing in a Social World.

Foreword xiii

Acknowledgments xvii

About the Author xxi

Part One New Analytics for a New Environment: The Evolution of Hotel Revenue Management Analytics, Technology, and Data 1

Chapter 1 The Social World Has Changed Revenue Management Forever 03

The Changing Marketplace 6

The Evolution of the Revenue Management Function 7

What to Expect from This Book 10

What s in This Book 13

Chapter 2 Demystifying Price Optimization 17

A History Lesson: Yield Management in the Airlines 20

Then Things Changed 22

Price Optimization 24

What Is Optimization? 27

And the Money Came Rolling In 36

Additional Reading 40

Revenue Management Perspectives 41

Notes 45

Chapter 3 Big Data, Big Analytics, and Revenue Management 47

What Is Big Data? 50

Where Big Data Meets Big Analytics for Revenue Management 61

Data Visualization and Big Data 63

Responsible Use of Big Data 67

Conclusion 76

Additional Reading 77

Revenue Management Perspectives: The Role of Big Data in Revenue Management Science 78

Note 82

Part Two The Expanding Role of Revenue Management 83

Chapter 4 Hotel Pricing in a Social World: Price, UGC, and Buying Behavior 85

Price, Ratings, and Reviews: How Consumers Choose 87

Business Travelers Loyalty and Demographics 101

User ]Generated Content and Lodging Performance 109

Conclusions from This Research 111

Reputation and Revenue Management Systems 113

Conclusion 119

Additional Reading 120

Revenue Management Perspectives: A Case for TripAdvisor Rank 120

Chapter 5 Integrating Revenue Management and Marketing 127

A Vision for Integrated Marketing and Revenue Management 130

Limitations of the Revenue Management Approach 134

Understanding Marketing Data and Analytics 136

Integrating Revenue Management and Marketing Decisions 137

Achieving the Vision 140

A Word of Caution 143

Conclusion 145

Additional Reading 146

Chapter 6 Total Hotel Revenue Management 151

Revenue Management Beyond Rooms: A Process 155

Guest–Centric Revenue Management 169

What Is the Goal of Total Hotel Revenue Management? 172

Putting It All Together 175

Conclusion 178

Additional Reading 181

Part Three The Future of Revenue Management: Pricing as a Business Strategy 189

Chapter 7 Pricing as a Strategic Tool 191

Strategy Considerations 194

Pricing to Support Business Strategies 203

How to Be More Strategic in Pricing 206

Benefits of Strategic Pricing 209

Conclusion 214

Additional Reading 215

Notes 219

Chapter 8 The Path to Personalization: Revenue Management s Contribution to the New Guest Experience 221

Personalization, a Vision 224

Moving Past Traditional Web Analytics to Digital Intelligence 229

Integrated Data for Digital Intelligence 231

Revenue Management Supporting the Personalization Vision 233

How Do We Get Started? 239

Examples of Starting on the Path to Personalization 242

Profiling versus Tracking Behavior: A Cautionary Tale 245

Final Advice for Revenue Managers 246

Additional Reading 247

Revenue Management Perspectives: Convergence of Digital Marketing and Revenue Management 247

Notes 249

Chapter 9 The Future of Revenue Management 251

Profile of a Revenue Manager 254

Revenue Management Career Paths 261

Revenue Management Organizations 264

Final Thoughts 277

Additional Reading 279

Revenue Management Perspectives: A Case Study in Organizational Structure for Revenue Management 280

Notes 282

Appendix 283

Discussion Questions 309

References 315

Index 00

Kelly A. McGuire leads SAS′s Hospitality Global Practice. She is an analytics evangelist, helping SAS′s hospitality clients realize value from big data and advanced analytics. She also led product management and business strategy for SAS′s pricing and revenue management analytics, working closely with IDeaS Revenue Solutions. Kelly has a PhD in Revenue Management from the Cornell Hotel School.