Given the complexities of operating in an increasingly dynamic market place – where new age operators have disrupted pricing patterns – smart price positioning and use of intelligent tools to analyse market trends in real-time have become increasingly important, argues Avinash Lodha, Chief Executive Officer, RezNext Global Solutions. In an insightful interview, he decodes some key market trends.
In layman terms, how does the system of integrating both the ends work?
By integrating two ends of the demand and supply chain, we mean we automate the flow of hotel room inventory through our distribution platform to the demand generators and vice versa – all bookings from the demand generator is automatically updated into the hotel’s system. We use intelligent APIs for this smooth flow of information across multiple systems within the hotel and with the OTAs. By integrating this flow, we then allow hoteliers to focus on strategic decisions like what target segments to market out to, what rate updates to be done and when, what promotions to introduce. Our business intelligence solution provides real-time data intelligence that helps hotels take important revenue impacting decisions, thereby also improving occupancy and in-turn profitability.
A major area of engagement for RezNext is its intelligent digital platform that helps boost sales. Could you elaborate on what are some key features of that service and how hotels could benefit from it?
Our intelligent distribution platform is aptly named so because we do a lot more than just connecting hotels to the demand generators. We automate the entire reservation process end to end which means as a hotel you are always ready to receive guests – no more waiting period at the check-in counter, no more missed out bookings and having to turn away guests which could potentially damage the hotel’s reputation. This also means all inventory including the last minute cancellations are sent back to all OTAs to be sold again. Hotels can thus ensure they sell out all their perishable inventory every day. The platform allows hoteliers to action the insights received from our business intelligence application quickly. All rate updates, stop sells, release of inventory, quick roll out of promotions can be real-time with instant notifications of these updates received from the OTA sites.
Our distribution platform today also gives out recommendations based on the hotel’s occupancy performance, rate trends in the market and competitor movements like sold out, promotional discounts. The mobile version of our distribution platform is purpose built to facilitate quick update of inventory and rates to meet the needs of the dynamic market even if the revenue manager is working from a remote location or is on the move.
How interested or involved are today’s hotels in incorporating such systems into their operations? What has been the response of it, so far?
In the 4 years of our operations, we have worked with over 5000+ hotel properties including marque hotel chains, leading independents and mid-market players across metros, destinations and tier 2 and 3 cities. The response has been great. Especially this year, since we introduced our new release we have been receiving great feedback from the industry. We have also introduced flexible pay-as-you-go subscription models which are being well received in the industry. Hoteliers today are completely aware of the benefits of technology automation, but we still need to educate them on what is the best mix of distribution solution for their hotel based on their scale, their need and the goals they intend to achieve – both short and long term. Our instant rate update functionality is a big hit among hoteliers as it does away with the delay in responding to market dynamics. Our clients like Golden Tulip have seen an increase in their OTA bookings by 30%, while another key player in the market – Clarks Inn – have seen an increase in room nights by 25%. The Manohar, a leading independent five-star property has also seen an increase in their ADR by 35%. These results are testimony to the value we bring to the client’s business.
How important has it become for hotels to weave in smart price positioning? More so, at a time when disruption has become the new norm. Have you seen an upward tick in the number of clientele seeking expertise in positioning themselves in the market?
Smart price positioning is what all hoteliers must target to achieve. In our market studies we have seen that hotels more than often decide their pricing strategy based on competitor action. The efforts are very reactive to a change in competitor’s price. We have been continuously educating hoteliers about the need to adopt a smart pricing strategy – one that is formulated based on the hotel’s own performance – current and historical, existing and upcoming events, current rate performance, expected demand, revenue projections, current ADR, location advantage and ofcourse competitor rates and trends.
We have been able to drive significant changes in the revenue and ADR for our clientele using the above practices delivered through our revenue management services. For JRD Exotica, a leading property based in upscale Delhi market, we have been able to improve their ADR by 40% & online booking revenue by 30%. Our consulting side of business is aggressively growing and we are seeing an increased need from hoteliers in getting their revenue strategy right through a profitable pricing model.
What category or segment of hotels are your main clientele? Is this realization of smart management and integration seeping into properties in Tier-2 and Tier-3 cities?
When we launched our company, our focus was on helping the mid-market segment by giving them access to technology tools to get online quickly and reap the benefits of increased online visibility. We have helped several hotels in Tier 2 and 3 cities get online for the first time and see an increase in their occupancy by opening up new avenues of bookings. We have also worked with aggregators to enable the budget supply from Tier 2 and 3 cities to be made available on their portal for instant booking. We also felt the need for empowering hotels with revenue tools such that these mid-market hotels would have the same opportunity as large chains and 4-star independent hotels to leverage the market conditions to improve their online booking revenue. Today, we are also seeing a great response to our comprehensive solution suite and revenue enhancing services from the 5-star segment.
Across Tier 2 and 3 cities we are seeing an increased need from players providing niche services – experiential stay, service apartments, home stays – to get their supply available on mobile market places for consumption. These players are also realising the power of internet, the need to be online and to intelligently sell their inventory.