ÐßÐßÊÓƵ

Transcript

Introduction
 
Hi, everyone. This week in Matt Talks, I wanted to talk about guest profiles and, specifically, the power of guest profiles. When we started ÐßÐßÊÓƵ twelve years years ago, we started our company in Prague, and and, really, we were building a hotel. And as we got closer to the opening of the hotel, we realized that we didn't like any of the systems that were out there, and they didn't allow us the flexibility to focus on the guest experience.
 
So we hired a few developers, and we started building a property management system at the time. And how do you go about doing that? And it really was us telling the problems that we wanted these developers to help solve. We didn't know how to build the architecture of a system like this because we weren't you know, we hadn't come out of this industry.
 
We just come out of hospitality industry, but we hadn't developed systems for the for for hospitality before. So we described the challenges that we were trying to overcome in this really forward thinking hotel where we didn't want a reception desk. We wanted that guest experience at the heart. And what turned out to have happened with our system back then and and the architecture was that the developers started building it all around the guests.
 
It became a guest centric system, where what we realized afterwards was that most of the competing systems or the legacy systems in the market had always focused on the room, you know, attaching reservations to the rooms of the hotel, and the reservations were central. So we shifted unbeknownst to us at the time. Like, we just really wanted to create a really great guest experience to a model where the guest profile became centric to the system. And that is a massive departure from what anyone else had done at this time.
 
And it's it's turned out to be a really powerful move because now twelve years later, with the guests at this heart of the the hotel, we can leverage things like AI really, really powerful to drive better experiences and more revenue for the hotel and really go beyond the very traditional metrics like RevPAR, revenue per available room, and really talk about things like RevPAG, revenue per available guest. And that's a much more interesting metric because we sit at the heart. The guest profile sits at the heart, and we have all the live data that feeds in from all of the outlets, the restaurants, the spas, and also the room revenue.
 
And combining and controlling all of that in the in the moment allows us this metric that we can now help and drive really great increases in revenue. So today's talk will be mostly about guest profiles. I'll share some macro data points that we found that really tell the story about why we have to focus on this. Then I'll dig into some of the benchmarks that that I think matters, specifically RevPAG.
 
I'll explain more why I think that metric matters. What drives performance of those metrics? So what are the underlying motivators to drive revenue per available guests? And then lastly, what does ÐßÐßÊÓƵ do specifically to help hoteliers drive this incredible metric?

Chapter
Traditional metrics vs. guest-centric metrics
 
So let's start with data. The metric that we as hotels always have and probably will continue to report on is RevPAR, revenue per available room. So you take the total room revenue of the hotel, and you divide it by the number of rooms that were available. And then that tells you kind of where the whether the blend of average rate and occupancy hits the sweet spot.
 
And as an industry, we share that data with benchmarking tools so that you can start to compare whether you're doing well versus your competition. What it doesn't share is whether you're really well at monetizing those guests for the remainder of their stay. So, you know, you might have a fantastic RevPAR beating all your competition, but you might be a highly inefficient hotel and using these guests to capture them in the restaurants, to have them go to the spa, to rent a bike. And I think, ultimately, that's much more important to investors and owners than just the very one-sided kind of view of RevPAR.
 
So we, for years, already started talking about RevPAM, RevPAG, so revenue per available square meter or square feet, or revenue per available guests. And, you know, there's been ideas around these metrics, but no one's really figured this out yet. And we're now at the point where we have. We have collected the data points inside our system.
 
We're building the reporting so that we can report on guest lifetime value, and report on revenue per available guests. And this is really a next era of hotels because this will allow you to show whether you are genuinely driving the best revenue per available guest in your hotel versus your competition set. So I went a step backwards, first of all, and I wanted to just really see whether there were named data points that show that if we take care of the guests, that they will end up spending more in hotels. And and first of all, there's this data point from McKinsey that says that seventy six percent of guests get frustrated when personalization is lacking.
 
And I think that's a really important data point because that means three in four guests will get frustrated if they don't notice that they're being personally served in some way or recognized in some personalized way. And especially with the power of the Internet, guests are very likely to leave those comments online. And your online reviews is driving a very rich kind of bed for AI to feed off. So and and less and less people will review tens and twenties of hotels as they book, they will take literally what AI gives them.
 
And and if the reviews on personalization, or service are really bad, it is even less likely that a lower reviewed hotel will get booked because you don't even get access to, like, photos and stuff on AI. It literally will tell you these three hotels are the best choice for you. So that's why it's really important to drive more personalization. There's this data point by BCG, the Boston Consultancy Group, that says that hotels using guest data for personalized experiences will see a fifteen percent uplift in revenue.

Chapter
Cost of guest acquisition vs. retention
 
So if you really talk to the guests and take them personally and recognize elements of their previous stays or know that they love spas, they're very likely to book incremental services. So we focus heavily in ÐßÐßÊÓƵ on making sure that we tell you that this is a returning customer or that this is a VIP customer, and that helps you then offer alternative services. There's this other data point by the Harvard Business Review that says that acquiring a new guest cost five times more than retaining an existing one. So if you think about attracting guests through the big OTAs, booking, and Expedia, you pay between eighteen and twenty five percent commission for those those customers.
 
And if you think what an average rate would be a hundred euros for a few nights, you're easily paying fifty euros to acquire a customer into your hotel. If they leave, and then the next time that they book, they go back to the OTA. The hotel has not done their a good job because they should have had that guest booked directly. And they should have enticed them and should have taught them that direct is better and that they get better benefits and better personalization when they do that.

Chapter
Guest personalization
 
Because a a customer that has been with you should be the customer that will book with you directly. Another data point is that personalized loyalty programs based on guest data will book repeat bookings by thirty percent. So when, you know, you wanna retain these customers and you drive a really personalized experience, the likelihood of them coming and booking direct goes up by thirty percent.
 
And then the last data points from Salesforce here is saying that sixty seven percent of guests prefer hotels that remember their preferences. Hotels that, you know, recognize that you are a returning customer. Because one of the things that I get frustrated by when I check into a hotel is, you know, they welcome me nice and warm, and they say, welcome to the hotel. Have you been with us before?
 
And that immediately puts the employee on the back foot because, you know, what if I have been there before and you just didn't know? And often, I say, yes. I have been here before, and that makes the conversation quite awkward. And, unfortunately, this is a challenge of the systems.
 
A lot of these employees working with legacy systems, they they just don't know that you have been to that hotel before. And with ÐßÐßÊÓƵ, we started, adding iconography on the reservation. We will tell you how many times this guest has been there before. We will tell you what the lifetime value is so you know whether a customer, even if they're returning, is also a high spender because they will go to the spa.
 
They will go and want that restaurant table booking. And and I think it really matters that you start to remember and lean into not capturing data because that's the really boring part of check-in, but rather using the data that we've captured before to drive much more personalized experiences. So revenue per available guest, if that becomes your central metric, it's important that you understand what drives it. So with room, with RevPar, it's total room revenue divided by the number of rooms.

Chapter
Centralizing revenue reporting
 
Whereas with RevPAG, it will be total revenue. So all revenue from all outlets. So it's important that all of the revenue flows into the PMS system so that the revenue reporting is centralized. And you divide that by the number of guests that are staying with you in the hotel over a certain period.
 
Once you start measuring this, you can really see whether you're getting better at serving your guests and making sure that your guests enjoy your hotel more because their loyalty will show up in revenue. They are spending more time at the restaurants, going more to the spas, one, because they enjoy their time with you, but, two, because your team gets more comfortable at driving bookings across those services because they're less focused on doing admin, and they're much more focused on driving guest loyalty. So if you have to rethink your strategy about serving guests from this point forward, if RevTag becomes your central metric, there's a few things to think about.
 
And I've got six kind of key points that I wanna just briefly talk about. The first thing is you must unify your systems. You cannot achieve this if not all of your revenue hits your PMS system. So if you're using Mew, make sure that all of your outlets, your parking spaces, everything needs to be directly linked to the PMS system or to ÐßÐßÊÓƵ so that we can essentially report on all this revenue data.
 
If you, once a month, take an export from a system and then give that to the accounting team, that revenue source won't be fed into the reports, and you won't be able to drive optimizations towards it. And I've noticed this, for example, with hotels that have a parking lot that that are reporting separately because the system doesn't interface. The modern interfaces should have all revenue feeding into the PMS today. That's just a minimum standard.
 
The second one is I think there needs to be the shift of the teams getting really excited about the data and getting really comfortable about having fun with it. Like, traditionally, when I was at the reception, I was told that, you know, there's all these standards. So as I check-in a guest, I had to acknowledge them with my eyes as they were queuing, and then I had to say their name three times in conversations. I had to mention the breakfast times.
 
I had to point them out to the location of the elevator and then mention minimum of two facilities of the hotel. That was the the the standard that I had at Hilton. And it really robotized kind of that experience. It wasn't taking guests personally because I was so stressed out that I was missing the standard.
 
Because if you had a mystery shopper, they were gonna tick box you, and they were gonna notice that I didn't use the guest name three times. And it actually whilst there was good intent behind the standard, it actually drove a much less personal experience than intentional. Whereas with modern systems, we spend a lot less time looking down at our screens. We spend a lot less time asking guests to fill in reg cards and payment cards.
 
But we do get spend time with guests in engaging. And we have to teach our new generation of hoteliers to have fun with it, to say, you know, I know little details about you, and I'm going to leverage that to create a much better experience. I know why you're in town. You're back on business and, you know, you know, are you back in town for a meeting?
 
And it's just recognizing why the guest is there that makes that conversation really, really fun. And through the AI notes that we've added recently in the system, we give you whatever we know, whatever you've captured before previously. We will feed you that information. We capture it from across the system so that you and your team members can have real good fun.
 
The third thing that I think is going to shift is that the revenue manager. Most larger hotels will have a revenue manager whose role it is to drive RevPAR, room revenue per available room. There'll be a real shift towards a new role or a modification of that traditional role to a total revenue manager. So they're not just going to look at room revenue, but they now should be strategizing and being in charge of all of the revenue and get reported on that.
 
And it makes for you know, whilst a lot of revenue managers are resistant to deploying really forward thinking revenue management systems like Atomize, actually, they should be leaning into it because it makes that job easier. They're not sitting in Excel, write writing analyses of why did the revenue pick up or why did it not pick up. The systems will take over so that they can actually shift towards a much more strategic and much more fun role to determine how how can we drive even more revenue from our customers. And and that's a really exciting repositioning.

Chapter
Setting goals for Revenue per Available Guest
 
Fourthly, I think it's important that hotels set a target on this new rev pack. So once you know what the revenue per available guest is, what's the goal? What's the thing you want to achieve? And it needs to be a spicy goal.
 
That that's how I set our targets at ÐßÐßÊÓƵ. So you say, okay. This is what the status quo is today. I would like that number in six months' time to be x so that you now start to track it and then report on it every day so that it becomes really natural.
 
So your daily report needs to include this revenue per available guest metric so that it becomes a really natural number to talk about in addition to revenue per available RevPar, revenue per available room. I'm not saying that metric will go anywhere, but we have to add a second metric, which is talking much more about total revenue per guest. The fifth thing, I would like to say is that once you start reporting, you need to artificially start to drive change. And you can do that through really having a a person in charge of it.
 
So that new total revenue manager would now be in charge of this metric, but they cannot, on their own, drive this. And and I think it's important that you start with brainstorming. Like, what is what are the things we can do as a hotel? And then run tests.
 
So you think, okay. What's the most impactful things that we can do? Let's run a test. If it's digitizing room service or if it's, like, little things that you want to change, that over time will have an impact.
 
But you've got to start running tests. And you wanna do this in a really exciting way and and motivate people to run these tests. And for every single test, you want to put someone in charge. And I think that is partly driving the ownership, but also the excitement of people in jobs.
 
Because rather than saying you must check-in as many guests as you can every day, if you say, we would like you to figure out how to sell more bookings at the restaurants and incentivize them on that. And suddenly, they become a supervisor of some sort of an initiative, and they can really prove out what they can do. And the the more tests you run, sometimes you find something that sticks and sometimes you don't, and that's okay. But running tests make the jobs much more interesting, but you also uncover some of these things.
 
And then the the last sixth area that I would say focus on is security. Whilst we should have more fun with guest data, it's also really important to treat guest data very securely. This is a very difficult time with lots of data leaks, so make sure that the way that you use guest data and personal data is not done in a creepy way. Like, you don't want guests to feel like you know too much about them, and you wanna really train the teams to work with it in the same way.
 
And I think if you've got a really good base, it's it's so exciting. The amount of information that we have on guests and what their preferences are so that we can personalize these experiences to to drive return guests, There's definitely been a real shift in the last couple of years. And I think this year, we'll see an an an acceleration of that shift towards driving these really exciting guest experiences for our hotels. So that was the background.
 
But now the fun part, which is how does ÐßÐßÊÓƵ help solve for some of this? And I wrote down a number of things that if I was a hotelier, I would get so excited about being able to use these tools in my hotel. So I'm just gonna go through twelve ideas that I have that you can take or you can ignore, of course, but I'm hoping that these are some of the pilot projects that you'll run. So the first thing is you've seen us put a lot of investment into match and merch in the last few months.
 
Match and merch is really critical so that we can see two profiles and saying, this looks like the same profile, the same guest. Let's merge them so that we have more data, and we can collect saying, you know, this day where from a booking or con booking to this direct stay, that is the same guest, and we want to merge them. And and we support this through the online check-in. If you drive online check ins, we will recognize if a guest has come through an OTA, and we'll ask them to replace their email address.
 
We recognize them if the guest if if you as a hotel use the ÐßÐßÊÓƵ point of sale in the restaurant and they use the same credit card as they used for a profile in in the the PMS, we will use the credit card data to connect the dots and we'll say, is this the same guest? And the match and merge feature inside the system is now really fun where you can really see how many profiles there are to match and merge. And this has to be a real conscious effort by you as a hotel because there's nothing more powerful than really, really clean data. So that's the first point.
 
Secondly, you've probably seen some of the changes that we've we've done in the guest profile in recent weeks. So one, when you see a reservation on the timeline, you see the little arrow with the that that basically says, this is a recurring customer. We will automatically tag a customer when they're recurring with the internals tag of return recurring customer, but we added the number inside that arrow that says three or four. And that means that that guest has been three or four times with you previously, and that's really, really powerful information.
 
The other thing we did on the guest profile in the dashboard was add a banner at the top that says, not only do we tell you that the guest has been there four times, we also tell you what the lifetime value of the guest is. So we calculate all of the revenue that these guests have spent with you in the hotel, and that gives you the lifetime value. And that's really powerful when you start to aggregate this data. The third thing is we're doing a lot on loyalty.
 
So one, we've got a native integration today to Salesforce.
 
We've done native integrations for some of the big brands like a Best Western. So if you do have a loyalty program, I'd definitely inquire with our team what we can do to support you in that area. In our ÐßÐßÊÓƵ point of sale, we've got a room service mode. So it's called digital order, but it's pretty much room service.
 
So, you know, we're in a traditional hotel. You go into the bedroom. And if you want to order room service, you probably have to pick up that big break of a phone in a corner and then call a human, which is a thing that in, you know, the modern generations, we don't pick up the phone anymore to call people and to tell them our orders. People are used to Uber Eats and Deliveroo, so you can create that experience.
 
You can just print a simple QR code or have it displayed on the television next to the menu saying, just scan this QR code to place an order to the room. And I think it's a really fun way to drive much an increase in revenue because people are more likely to order room service, but you can take it beyond the room. So if you think about, for example, if you've got a pool area, every deck chair should have a QR code where you can start to order directly from the chair. In the gym, you should have protein shakes on offer that you can order through a QR code so that at the end of your workout, you will have a protein shake delivered to you.

Chapter
Maximizing underutilized spaces
 
The fifth one is diversifying spaces. So if you have underutilized spaces, like, you know, put a coworking space in a in a corner that you can rent out, you can think about adding parking inside the system. I think parking is one of the highest demanded kind of features in our system that we've added in, and we see this incredible increase in revenue because we're offering that now as an upsell in all of our different products. And and that leads to the sixth one, which is upselling.
 
We've added upselling of products, so adding, like, breakfast products or champagne in the room on arrival. So products we've had for a long time, but we've now also added room upgrades into our guest facing products. So a lot of hotels have not configured this. So they can go straight into the ÐßÐßÊÓƵ settings and saying, yes.
 
I want to enable this for online check-in, and then we will offer them these upgrades into to into higher category rooms or adding products through our kiosk and through our online check-in. Seven, it it's a feature that we added on the kiosk, which I think is really powerful because when you walk into a hotel and it's nine o'clock in the morning, you know that the receptionist is gonna tell you that you can store your luggage and come back at three o'clock. It is really not a great experience because the housekeepers start at eight AM. So if they continue if you enable your housekeepers with mobile devices and they can return rooms as and when they get cleaned, we can offer those rooms in the kiosk today for an additional fee because, obviously, there is additional effort to get these rooms back into operation sooner.
 
And we're seeing real impact from hotels that are leveraging these checked in rooms for early arrival upsells, and it really, really works. But you do need to make sure that you enable your housekeeping departments. The eighth one would be, like, integrating with something like ResDiary, a booking platform. We have a natively built in to ÐßÐßÊÓƵ so that on the guest profile, when the guest check-in happens, you can say, would you like me to book a reservation at the restaurant?
 
We're filling up quite quickly, so I wanna make sure that I've got a table for you. So we can live integrate ResDiary into the PMS, and it also integrates with our point of sale solution. So that reservation gets pushed straight into the restaurant's reservation system. The ninth one is Oaky.
 
So Oaky is this great upselling tool that we have a phenomenal integration with. They have made a native embedding inside our system on the check-in screen so that if your receptionists are helping check guests in, we will say, hey. Show, you know, the live upgrades that are available for this particular guest that helps drive the upsell motion. The tenth one would be spinning up a booking engine for alternative services.
 
And one really great use case here is bicycle rental. A lot of hotels have bicycles in front of the hotel, and they don't really get utilized because it's sometimes too hard to make the booking or you have to go to the reception. There's another queue at the reception. So why not make them bookable?
 
So what you could do is you could have a CRM integration. So you could have, for example, a WhatsApp integration that starts a thread with a customer, and this could be like a runner dot ai kind of integration that says, hi. Welcome to the hotel. Would you like to book book a bike for the for your entire stay?
 
And the booking engine could be served to the guests and that they can instantly book that bicycle rental. The eleventh one. We're almost to the end of this. Sorry.
 
That I have so many ideas that I wanna share. There's this great hotel in Paris that took a basement room, and they turned it into a karaoke room. They said, this is a room without windows. I don't know what to do with it.
 
We're just gonna put a really nice sound machine in here with a little bar and, basically, with a QR code that can start to order drinks from the restaurants. And you now rent out this karaoke room again through a booking engine link that we sell. They can make revenue, and they they really do on a Friday and a Saturday night. They make a lot of revenue from this basement room that was previously non revenue revenue generating room to suddenly starting to drive revenue.
 
And it's just really thinking out of the box of what you can do with these spaces. It could also have been a cinema room, for example, where you can do movie screenings. And then the last one would be, like, we've added recently dietary restrictions into the profile. You just have to set up in the online check ins that we ask the guests prior to arrival whether they have dietary restrictions, and that becomes a very powerful nugget of information that you can use saying, I noticed that you have some dietary restrictions.
 
Do you want me to make a booking at the restaurant and let them know about your restrictions? And it's just, you know, a piece of knowledge that makes the conversation much more powerful because you recognize something about the guest, you acknowledge it, and then you use it to to to make a reservation. These are just the first twelve ideas that I could think of from the top of my head, and it is this type of kind of tests that you can run. And you can put someone in charge of this test to making sure that it gets executed.
 
But there is so much underutilized power in ÐßÐßÊÓƵ today that I see every time when I stay at a ÐßÐßÊÓƵ hotel. I'm like, I don't think that the online check-in asks for my dietary requirements, and then I check the settings. I'm like, yeah. They didn't set it up.
 
And that's a pity because there is so much potential, but you definitely need one of these revenue managers who truly owns the RevPAG, the revenue per available guest metric, who has a target against it, and who then has the ownership to start driving a real change because it is really, really fun. Like, being able to diversify and do much more than just be a bed factory is a really, really fun job, but we just have to make sure that we have the right team members in place, that you've got the right systems in place, and that you then start driving a real change. I hope you enjoyed this Matt Talks because I really love it.
 
Because, you know, thinking about guests and how do we drive a better guest experience is something that I feel very, very, very strongly about. So I hope you enjoy that. Thank you.