Revenue management and marketing are ready for disruption. The same approach with the same tools, yielding the same results is no longer acceptable.

Note: This is a guest article by Rich Maradik, founder, nSight For Travel

This past year, I’ve met with executives from countless ownership groups all over the world.  Even though they all seem to be enjoying the performance of the current “up cycle” for the hotel industry, three themes emerged which frame their underlying concerns for the future:

  1. They don’t like the OTAs
  2. They want their brands and management companies to be smarter about pushing rate
  3. They think most travel marketing is uncreatively “formulaic” and can get better

Same Old, Same Old View on OTAs

The owners’ dislike of the OTAs is nothing new. But it’s not going away because the OTAs are not going away.  Backed by a billion dollar advertising machine, OTAs are top of mind with consumers and their cost of revenue to a hotel is steep.

So owners want to know if hotel brands and management companies are doing all they can in the current digital distribution environment to maximize rate and capture higher levels of transient business with their marketing in the face of the OTAs.

Quite frankly, the answer is no – because hotels are using the same disparate tools to price and market as they have been for over a decade. The good news is – there’s light at the end of the tunnel.

Old Versus New Pricing Strategies

Let’s focus on the most important and volatile customer segment – transient travelers, which include both leisure and unmanaged business.  Hotels determine published BAR prices by future arrival day generally using the following inputs:

  • Day-by-day forecast based on their own historical data
  • Evaluating the fluctuations in rate by future arrival period versus competitive hotels
  • Monitoring pace to forecast
  • Assessing past RevPAR performance in STR reports
  • Reviewing future “on the books” business within the GDS or PMS through Hotelligence reports
  • Newer tools add factors such as weather, events, economy fluctuations, etc., to capture nuances

It’s essentially an educated guess on tomorrow based on yesterday’s results forecasted forward. So what can be added to this process to improve future pricing decisions?

For starters, hotels should have an understanding of available transient demand and how well they’re doing in capturing it versus competitive hotels, or the broader market.  It’s a key factor that hotels need to consider now.

Thanks to new BI innovations, this data is now becoming available to revenue management teams inside brands and management companies.

Here’s how.

  • Transient consumers do most of their “looking and booking” for hotels online, primarily on the vast network of OTAs and other third-party websites.
  • Data can now be aggregated on consumer behavior as they shop, allowing a “real-time” view into how a hotel’s price and positioning is influencing the transient business it attracts and converts.
  • Within a data warehouse, consumer behavior, rate and demographics can be integrated for a single view of how these factors influence each other and consumer decision-making.

More often than not, this new predictive data helps revenue management teams make different pricing decisions than they would have made using the same tools and information from the past.

For example, a hotel might see that in the next 30 days some of its competitors have lowered rate. The initial response might be to follow the trend. But if a hotel can see that consumer demand, or looks for the hotel and its comp set are strong during that period, there is justification to hold rate until you see the booking trend materialize.  The consequence for this can be improved ADR and RevPAR performance.

Old Versus New Marketing Strategies

Generally speaking, hotel marketing teams think of marketing in four categories, each with certain channels utilized to reach consumers:

  • Brand Marketing:  television, radio, and print
  • Loyalty Marketing:  email and direct mail
  • Social Marketing:  Facebook, Twitter, Instagram, plus YouTube
  • Digital Marketing:  platform-focused in Google AdWords, banners on TripAdvisor and the OTAs, content marketing, and display banners and retargeting

No one ever said marketing was easy.  However, hotels have unique challenges:  it’s near impossible to get brand messages to resonate with consumers as they used to because of the sheer volume of OTA brand marketing.

What’s more, loyalty programs have expanded their scope, thus are less effective.  They used to help a hotel capture a higher share of a frequent travelers’ business versus other hotels.  But now loyalty programs must also convince consumers not just to book within their brand, but also, to do so directly with them and not on third parties.

That means if a hotel is going to significantly grow share of transient business it must do so primarily through digital and social marketing. The verdict is still out on the true ability of social to turn likes or pins into bookings, so let’s go right to digital marketing.

The fact that hotels are traditionally slow to innovate with digital strategies is a source of frustration with most owners.

Some observations include:

  • SEM/PPC marketing on Google has become a “necessary evil.”  But it does not drive high volumes of qualified traffic to a hotel’s own web site.  Why?  Because the OTAs simply outspend hotels on the best performing keywords.
  • Display ads on large travel sites such as TripAdvisor and Expedia can work well because they appear where consumers are.  However, they can perform even better by using predictive data on transient consumers looking on other sites.
  • Content marketing delivers views.  But as this practice continues to grow, it’s important to differentiate using better targeting and personalization data
  • Banner advertising and retargeting is increasingly commoditized because consumers are just not clicking on generic ads.  “Programmatic” advertising through data management platforms (DMPs) such as Adara or Sojern which have data on consumers with intent to purchase a variety of travel products are limited in effectiveness – their intent data only reflects their data contributors’ views (some of which are hotels but others are not and these don’t necessarily suggest the need for hotel stays, e.g. just because I rent a car in LA doesn’t mean I want a hotel in LA.)

Although it provides a better alternative than historical data targeting, DMP data does not provide the predictive analytical details of when consumers are actually shopping for your hotel and your competitors, or enable you to benchmark your relative demand based on comparative rate. Knowing this broader intent information for your entire market facilitates better targeting based on intent with geography, profile as well as hotel revenue strategy.

Practical demonstration

Take this example of what can be achieved.

Based on our analysis of searches on more than 5,000 third-party web sites, we can help the hotel target active shoppers. Selecting the U.S. as the source market and weekend as the stay pattern, the hotel now knows that more than one-in-five (22%) of Americans looking for a weekend stay at its hotel and comp set are from New York and the top consumer profiles are the high-spending go-for-it families and experience seekers.


The ad on the left below appears with generic images and generic messaging and may be targeted to a particular source market that exhibited high bookings in the past. But the ad on the right references the data shown above and engages a specific target audience – the “go-for-it families” persona who wants to stay in the heart of Times Square and is “looking and booking” now for either the Premier NYC Hotel or a hotel in its competitive set.


Personalized Ads Delivered Based on Target Shopper Arrival Dates Generate Higher Click Through and Greater ROI


Images and text are matched to consumers who look like go-for-it families – and best yet, you can target the ad based on the average search lead-time, thus delivering bookings to specific arrival periods.

Five disruptive approaches

To improve digital marketing, brands and management companies must adopt new strategies. The key is understanding what the consumers look like who are most likely to book a room for a particular hotel, for a select arrival period.  That data then must be easily integrated into campaigns across all digital marketing mediums.

This data is available now – marketing teams within brands and management companies can now see very detailed information about how transient consumers are shopping their hotels on websites other than their own.

Leveraging this new predictive data, disruptive hotel digital marketing includes these strategies:

  • Targeting active shoppers, not past buyers
  • Lead times (search-to-book and book-to-stay – these metrics vary by source market, destination, consumer profile and season)
  • Personalization of messaging and images to consumer profiles most likely to book (source market where consumers live, what type of consumer profile they fall into such as Baby Boomers, Millennials, etc.)
  • Scheduling ads based on consumer lead times that vary by source, destination and persona arrival dates (next 30/60/90 days, weekend or weekday, etc.)
  • Integrated marketing and revenue strategy based on consumer demand for your hotel for relative competitive rate

This elevates traditional campaigns to be more effective by being more targeted to active shoppers, more relevant to those shoppers, and more timely for both consumers and suppliers.

Talk Versus Action

As one senior leader of a large hotel ownership group recently told me…”I’m tired of seeing the same power point presentation every year where the ops team tells me they’re doing everything to grow rate and get more leisure business.  But in reality, they just keep doing the same thing year after year, with the same tools.”

He’s right.

Revenue management and marketing technology is ready for disruption.  New tools that yield new results should be adopted now.  Brands and management companies that introduce new data and technologies to their revenue management and marketing practices will produce truly differentiated financial performance.

And that makes for some very satisfied owners.

nsight humanizing

NB1 To face the challenge of growing OTA influence, nSight has introduced a new report that helps hoteliers understand how consumers shop their website compared to the OTAs. Hotels can see the consumers they’re missing and where they’re winning and losing the OTA share game. Learn more about it and sign-up for an introductory offer here.

NB2 This article was written by Rich Maradik, founder of nSight for Travel. It appears here as part of Tnooz’s sponsored content initiative.

NB3 Image by Shutterstock Hotels
Revenue management and marketing are ready for disruption. The same approach with the same tools, yielding the same results is no longer acceptable. Note: This is a guest article by Rich Maradik, founder, nSight For Travel This past year, I’ve met with executives from countless ownership groups all over...